Regional thing. Most older neighborhoods that I've lived in, have had minimal fences, typically about 4 feet high. People chatted over the fence, kids climbed over to retrieve balls and toys, etc.
When I moved to Texas, every house had a 6-foot stockade, and a sign on the lawn for an alarm system. The only evidence that the neighborhood was inhabited was that you'd see a car emerge from a garage once in a while.
Back to Madison, the house we live in now is in a neighborhood that was built with no fences, and with a deed covenant discouraging them. People want to look out and see nice grass and trees, not a wall. Fences gradually went up, primarily to contain dogs and kids, but they are minimal. Neighbors are pretty sociable with one another, but we also respect one anothers privacy.
When people want privacy during the summer, they plant shrubs strategically.