The solution to the 5% error is to do the tagging automatically, but make the uploading friend confirm each photo to ensure that it was tagged properly.

I don't consider tagging itself to be inherently social. Being in a social setting with someone is what was social. Putting a picture of someone on Facebook is social. You can still comment on an auto-tagged picture just the same as a manually-tagged one. The only difference is that you save some time for those people who contribute the most (the friends who take dozens of pictures at every event and then spend a couple hours uploading/tagging them the next day). By decreasing the necessary effort of photo-sharing, I would expect to see more uploading and tagging.

A side benefit is that it could eventually make discovery easier. How many pictures do you have at a bar or somewhere else with a bunch of people you don't know in the background? How many times have you hung out someone somewhere, have a picture of them, but didn't get or can't remember their name? Automatic recognition gives you a better chance of meeting some of these people again.

For those saying this is a privacy issue, the uploader doesn't have to see the auto-tag of a non-friend. Instead, the person who has been auto-tagged could be notified and have the option of allowing/disallowing the tag to occur.