“We reserve the right to modify or terminate the Service or your access to the Service for any reason, without notice, at any time, and without liability to you,” reads one clause in the new terms of service as of January 19, 2013, which also later state: “We reserve the right to refuse access to the Service to anyone for any reason at any time.”
At the end of the day, you are not forced to use this service.
Now, I recall some previous issues in which these companies may have actually released personal information to advertising companies, but is this not a inherent risk to utilizing "free" services.
I for one stay away from Facebook, Instagram and avoided MySpace and so forth in the beginning days of the internet.
I would say they are well within their right to ask to for any form of validation they wish, regardless of insane it may be but like i said, the implications of such requests seems ridiculous.