The problem is that Buzz automatically adds email contacts as followers, and then publically displays who all of your other followers/ees are. So, if you were sharing items in Reader with a small group, once Buzz went live, you were also sharing them with everyone who was automatically added, and they could see who else you were sharing them with. Completely unacceptable.
I think most people were already doing public sharing in Reader- it was the default there. (Not of the people, but of the items). I am not sure what exactly was happening with private sharing in Reader, but it was an option and was limited to fairly small group. I made my google reader share's public and posted them on my blog. My comments showed up in that feed.
You also would see the names of people that would comment on the items of people you were following in Reader, even if you weren't following them. So, I definitely see your point about names, but there were cases in Reader where this was already happening.
In any case, I turned on Buzz almost right away. I got to the first step and decided I needed to turn around and clean up my contacts list, I then turned it on. That could have easily been designed into the activation process.
Integration with Android and Picasa make things even worse: http://news.cnet.com/8301-31322_3-10451428-256.html
Plus, you can easily inadvertently expose other people's private email addresses because of their incredibly stupid ui: http://techcrunch.com/2010/02/11/reply-google-buzz-exposing-...