The hole is in the 'friends' paradigm.

Live Journals are missing something: the 'acquaintance'.
There's something (actually, several grades of something) between a friend, who ideally is someone you know, like, admire, and want to talk with and exchange ideas with daily... and an acquaintance, a person who might also be a friend but whom you don't necessarily want to share your deepest innermost, and certainly don't want to look at everything they have to say. There is also the possibility of the Intriguing Stranger - my friend iceraver gets frequent 'I'm adding you to my friends cause you're hot/cute/fascinating' messages.

Now, the problem with the paradigm manifests at the user level thusly. If you set up a friends list, on your friends page, you see everything (unless you select a subset, but that's not the default and it takes a specific action) that's posted by everyone there.

If you only want to read some people on a weekly basis, you can't really do that by default.

So here's the rub. I mentioned to a friend (robotech_master) that I thought the minutia of his life - what he had for lunch, the people at his job-training who irritate him, what the weather was like, and minor details like that - would better be hidden behind an LJ-cut. Cheeky of me, I'm sure, but this is someone I've known a long time. I figured he would just tell me 'No, thanks' instead of being offended, but I was mistaken.

He says that he uses LJ as a journal.

So do I. But I put stuff that won't necessarily be of interest to everyone behind cut links, or restricted to friends, or even behind private.
Not everything I think is scintillating. Not everything I write is cogent, coherent, or even particularly useful to anyone but me. This is the beauty and power of hypertext. It doesn't have to be linear and in your face.

The web created a new performance art medium, the 'Blog', and LJ's are essentially an instantiation of that medium. Everything you put on the LJ, you intend to make a part of a public, permanent, floating document that is available to the world. Everything there is a performance, an act, a front, a conscious and deliberate thing. Even the most spontaneous things you do there, are at some level informed by the fact that you are doing them where other people can see them.

Intimacy by proxy.
So, that's why I dared to ask for LJ-Cuts.

And, that's why I had to take him out of my friends list - not because I necessarily want to do so, with him or with liralen or with any other person - but because I don't want to automatically read everything by him when I navigate to my friends page by the links provided by the system.
I want to read his journals once a week or so. And, to do so, I have to take himn out of the 'supported friends' and put him into the list of 'remember to take a look at this guy's page' ... which is too clumsy, this is why we have computers, to automate this kind of thing.