This is not an issue of paranoia (except for those who actually use PRIVATE addresses internally and have properly configured their gateways to be paranoid about even seeing such packets, let alone routing them).
Unless I'm mistaken, a prime reason for the evolution of RFC 1918 addresses was that it was once common practice for people to help themselves to PUBLIC address space to use on PRIVATE networks. As the world got more connected, these addresses occasionally got leaked and caused address conflicts. Using RFC 1918 addresses prevents conflicts with public/registered space. Obviously the possibility of leakage still exists, but with RFC 1918 the havoc potential is diminished to a mere irritant level. Which is what the incident that started this thread appeared to be.