Well would it be that hard to make the coloured dot change shape as well as colour. And Zega is right it would be annoying to do and few would probably want to do it especially when a similar automatic system is in place.
Well, does it really matter? People might be inactive, as Zega mentioned. In general, if you are interested in chatting with people, go to a chat or use aim or msn. On the other hand, since the online user list is gone, this feature should be optimized. This will cause lack though. Putting that on your profile yourself would help your friends to know if you are online or not, but there is nothing more to it, and should not be implemented in the profile setup.