IDG Answers is a community of experts who are passionate about technology. Ask a question or answer one below.
My first thought was to disagree with your presumption about lack of willingness of people to surrender near total information about themselves by pointing to Google and/or Apple. However, the more I thought about it, the more flaws I saw in my comparison of those companies to Facebook. Facebook has very limited offerings compared to Apple/Google; despite their best efforts to become more, Facebook remains almost solely a social network. Apple and Google bring so many other services to the game (music, video, utilities, cloud storage, etc.). Plus, it is already easy to access Facebook on any brand of smartphone, so really, why would anyone pay a premium for it.
Also, this probably impacts HTC more than it does Facebook. Despite making some great phones, HTC is not doing very well, and having a fairly high profile product tank (even one that is essentially just their midrange phone) doesn't help the company's bottom line. In fact, having the phone $0.99 could benefit Facebook, as it would likely make people more willing to pick up a decent phone for next to nothing up front.