"(Likely an overabundance of trust or a lack of understanding of all the real implications and potential for exploit.)"
I think that's a lot of it. People aren't trading privacy for convenience... people are taking convenience. It makes a lot more sense when you think of it that way.
You can do an experiment yourself to show this; take 5 non-techie/non-HN people and explain to them exactly what this thing does and how it works. You'll find people's attitudes change, rationally or otherwise, which I present only as evidence that they haven't thought about this and incorporated it into their worldview, not that they are right or wrong. Or watch this: https://youtu.be/XEVlyP4_11M?t=24m54s John Oliver on Government Surveillance.
Perhaps ironically, mere nude photos of myself aren't really what I'm worried about. I mean, I wouldn't be happy if they got out, and since I'm not in the habit of texting them about I have questions about where they came from, but by and large, nobody would care and it would affect my life only briefly. I'm far more worried about the government scraping everybody's postings on Facebook and building up a GoodThink/BadThink database, which I know basically already exists, because our political parties (let alone our intelligence community) build voter databases that are probably at least 90% accurate on that front. A concrete list of Everyone Who Disagrees With Me, one accurate enough for someone powerful to decide the rest of the inaccuracy is acceptable collateral damage, is scary.