Since there are probably people on this forum that are young enough to not actually remember Google+'s launch (or just not be paying attention), this was one of its headlining features (limiting post visibility to specific "circles" you chose). It was a great idea, and would have been super useful if it was ever used by anyone but Google fanboys.
Google decided that the way to launch a new social network was to piss off the nucleus of it, namely, the users of its existing social apps. By canceling Reader, and going on a long, obnoxious push to unify gmail and YouTube accounts, two things literally no one wanted.
If they'd been clever enough to make Google+ an extension of those things, it might have gone somewhere.
That "real names" policy is the reason I have always been careful to never open YouTube while logged into any Google account: the understanding I gathered from the noise back then was that, if you ever logged into YouTube or Google+, and then Google for some reason decided that your name was not your real name, you could permanently lose access to more important things like Google Talk or Gmail.
The sad thing is that Facebook had the exact same functionality with lists. You could scope posts and everything. Someone made a clone of the Google+ Circles UI using the Facebook SDK to sort your friends into lists that I used and I still use those lists to scope posts to family only etc.
