I think I would pay $1-2/mo for a custom algorithm that eliminated ads and sorts content the way I want. But Facebook probably makes more money on certain users then that anyways.
It wouldn't be difficult to build a downloadable tool that kept your data on your own machine. RSS/Atom feeds + machine learning based on your own votes. You could integrate things like your email inbox and chats if you wanted to have a private timeline of what was going on in your life.
Destroying Facebook's business model is the red herring that noone brings up. Their ability or need to make money is not sacred and the company has failed its assumed role as a steward over the worlds' intimate details.
What needs to be done cannot be articulated in more unequivocal terms: mass data collection needs to die, starting with Facebook.
there's really only two possible revenue models for a company like facebook: using your data to target their own advertising, like they currently do, or selling your data to other ad networks and other parties who feel they could get some value out of it. Do you really want ads to go away, when the alternative is selling your data directly?