I think updating your status, twittering, or blogging from council chambers is ok. I also think Jeff should have written more (not less) about what he was hearing. In this case, providing fewer details upset some people.
Here's the original Olyblog post.
Here are the multiple threads at Olyforums (here, here and here). You probably need to be a member at Olyforums to read that last one.
Here's the Olympian story and the comment thread for it at Haloscan.
In regards to how this even started, the Olyblog post was probably put up by someone who isn't on Jeff's Facebook friends list anymore. Facebook is assumed to be a somewhat private forum, and they have some very explicit rules to that regard.
Q: Is it permissible to share content taken from Facebook?
Q: When is it OK to share information gained from Facebook?
A: When it's justified. The status of information placed on Facebook is murky because it is neither entirely public nor private. That being said, if the information is particularly newsworthy, like the MySpace page of the Virginia Tech shooter, then it should be shared.
Sometimes, Facebook can reveal an interesting take on a tired story, like when friends of members of the Rutgers women's basketball team jokingly called the players "nappy headed hos" on their Facebook walls during the high-pitched Imus controversy. However, the political leanings of a presidential candidate's estranged teenage daughter should not be making the rounds in the respected news media.
I believe the reason for the coverage, and therefore the blame, comes from the source of the story. Slate is one of the foremost respectable internet publications, and holds itself to journalistic standards typical of print magazines and newspapers, not political blogs. Many sites take cues from the way Slate reports on the internet, and their coverage of this nonevent resounded in the mainstream press. This type of material is posted all the time on many political blogs, particularly Wonkette, which posted a follow-up article with pictures of the underage Giuliani drinking at a party. The reason why these articles are generally unreported in the mainstream press is because they come from the world of blogs, which the mainstream press is still not entirely sure how to deal with. Those unconscious quotation marks, in print or in tone, are readily apparent in news from "the blogosphere." It is inevitable that the two will grow closer together, as blogs like DailyKos and Gawker have become their own miniature media empires, and respectable news sources now regularly feature blogs on their site. One can only hope that this will result in higher-grade reporting from blogs, and not lower standards of news journalism in the mainstream press.