Grouping contacts is an impossible feat isn't it? We have to add Bob to Sport, Work, Musician, 'Allowed to Call after 10pm' and all those other groups we never keep up to date.
Like all user supplied up-front people classification systems Google+ Circles can quite quickly turn into hierarchy ladders when you manage your contacts using them, especially in a social context.
Contact grouping, grading and intimacy-scoring questions arise like : "Why am I not in your Personal folder?" "Why am I only in Acquaintances?", "Why am I not in group X?"
It makes for unhappiness not to mention all the manual labour of managing those connections.
The flat monism of classifying all your people as simply 'friends' and allowing the system (not you) to speculatively match between profiles managed by the identity owner is elegant. It causes less arguments over status and how other people classify you.
Baboons would be relieved to have such a thing.
Flat'ish, loosely coupled metadata overlaps between people such as : attended same school, favourite band is x, graduated in Kent, holiday in France, has photo of Mt Everest provide a more resilient model in the end for both programmatic and humanistic reasons. It also a more natural petri-dish for harmonious social groups when developing new services.
The degree to which this metadata is enhanced as you interact with 'your people' defines the living breathing classification of what they mean or meant to you. It allows for relationship management (manual and auto) between the people you already know and it also allows for the emergence of machine dialogue such as 'People You Should Know'
It's dynamic and weighted through use - it's no longer the leaden categories of 'Work', 'Home', and 'France'.