Right now it seems as if anyone can say anything on facebook, and this includes false accusations and slander about character. If the libel laws applied, then people would have to think twice before just saying any old thing on their facebook page and it would make all of us more responsible and more aware.
The whole point of libel is to allow someone to protect their reputation if someone maliciously publishes a malicious lie about them purposely meant to cause widespread damage. Since Facebook is a place where people publish ideas, and these ideas can reach a large enough audience to cause severe damage to a person's image, I see no reason why libel law can't be applied. No, Facebook isn't technically a newspaper or a book or a magazine, but I don't think the fact that it's just an online social media site should make a difference.