Did you manually set the privacy of the application when you added your application? If you go to your Facebook Settings, see what you set your application to. The privacy
parameter is restricted to what the user sets on their account.
E.g. If the user has set "Friends", but the app uses "Public", then the user's preference is used. But if the user has set "Public", but the app uses "Friends", then the app's setting is used, as it's more restrictive than the User's settings.
In short, the most restrictive privacy setting between the User and Application will take priority.