I 100% agree, however I really didn't like manually curating those circles ... I share a relatively diverse set of things/interests, so would have loved to leave it up to the other party which facet of my "feed" they could have subscribed to.
This isn't my use case, but a perfect example is people with kids. They're gonna share pictures and stuff of their kids, but as I'm sure you've seen, tons of people make comments like, "I wish I could just filter out pictures of babies and dogs!".
Any system that requires manual curating of these things by the user is doomed to fail. I'm probably the demographic most prone to try features, so I'll try to make some circles, but I have to admit failure.
Even whatever you called it in livejournal where you had specific sharing groups of friends - that was a burden to maintain. I eventually lost track of my organization. It just wasn't worth it.
All the automated systems fail as well. I don't see any way the overlaps can be automated without some people either missing out, or other people getting a bit much.
The formality around making a discrete group of "Circles" was the problem. If they just let you have multiple feeds and you can add and remove people from those feeds it would have been fine. In those circumstances, the issue isn't you sitting there categorizing how close you are with each of your friends. You're just deciding who you want to share things with, it's not unlike a group chat you might have with a bunch of friends.
I also remember reading about this thing the "kids" are doing these days where they just spin up a dummy private instagram account and give a bunch of friends the password. The instagram account winds up becoming a sort of ersatz web forum that they use to plan social outings and share pictures. Inviting new people is as easy as giving them an invite to follow. Granting write/mod access is as easy as giving them account username/pass. It's a pretty clever hack to turn Instagram into a micro-forum.
And it winds up being a better implementation of circles. The "circle" is object of interest. It's not a categorization that you put people in, it's an entity in its own right.
This isn't my use case, but a perfect example is people with kids. They're gonna share pictures and stuff of their kids, but as I'm sure you've seen, tons of people make comments like, "I wish I could just filter out pictures of babies and dogs!".