It was a serious suggestion. FireEagle let's you control the privacy of your location data. You can specify the precision of data provided to consumer apps, eg country, city, co-ords.
In this case loopt can provide fireeagle with exact co-ordinates and fireeagle can forward only your city to dopplr, and which neighbourhood you are in to your facebook/dodgeball friends.
I've had some thoughts in the past about a couple different mobile applications that would benefit from location data. It looks like the dev platform these guys are building could be the answer.