Right and this is where I think a lot of the mockery of the way people use FB makes no sense. Yes, I agree that no-one has that many real friends, but I think that is getting too hung up on the word "friend". Partly this is FB's own fault, because they market themselves as a way to stay in touch with your friends, family and schoolmates but those links are all grouped under the one name "Friends", which in other contexts we use only for closer relationships. In contrast, on Twitter you "follow" people and have "followers" and "followees" but people don't mock Twitter just because in other contexts, we can say things like "I'm a follower of Buddhism" or something like that.
If it makes things better, people should simply imagine that FB calls them "Contacts". Some of those close, some of them are not. It's up to you whether you want to add only close contacts to your FB, or whether you're happy to have looser affiliations on there. In practice I'm a pretty private person, and I deliberately am willing to add people I've met loosely, just because it makes me a little bit more socially open than I otherwise would be.
But other people are not using it wrongly if they choose to be casual with their contact list, nor if they choose to have close friends only. Both are perfectly acceptable in my mind, and people shouldn't let themselves get overly hung up on the word "Friends".