Liberty is good because it gives you more workable land with culture than with the other social policy starters .
Than with the other starters, but not than Legalism, which basically gives you double the Liberty opener for the first four cities, plus you have the Tradition opener. You need to race to settle cities to make use of Liberty's opener at a time when that +1 culture per city is much use, and economically I find I can't settle more than about 5 cities in the first 75-100 turns; in my current game I had a great wide start, getting to 5 cities before turn 75 - but it was another 50 or so turns before I could expand any further, and even on turn 300 or so I have only 7 cities. Every city needs a monument to expand, every city needs a granary to grow, every city needs a library to give you any benefit at all from the faster population growth compared with going wide.
That's 3 gold per city right there just on absolutely essential buildings; where does the money come from to sustain you while you're building the roads to connect them?
Meritocracy is poor and needs improvement, but happiness is not a huge constraint any more and there are quite a lot of ways to circumvent it - for a start wide empires are good for religion. GhostSalsa's screenshot makes the point - sure he'd have 20 rather than 10 happiness from Tradition, but he's got plenty of excess happiness as it is so that doesn't much matter.
By contrast Liberty absolutely, desperately needs a money-generating or money-saving policy.
On the 'tweak a policy tree' thread I suggested adding a 33% discount on building maintenance to Republic, in addition to its current effects - as you have those three essential buildings per city, that's basically equivalent to saving the maintenance on one in the early game, much the same as Legalism gives you for Tradition's first 4 cities, but Republic is a later policy (I actually shuffled the tree to make both Citizenship and Representation prerequisites, which makes both game and thematic sense).
The social policies themselves give you a free worker, a free settler and a free golden age. If you finish the social policy you also get a free great person of your choice. So why not use liberty.
Because mostly these aren't substantial boosts. Liberty basically does one thing and one thing only: boosts production. Settler and worker for free are basically just a set of free hammers, as is the discount on future settlers built in the capital. Republic is exclusively a production bonus as it stands. But you can't afford all the buildings you're producing, and nothing much about saving hammers really favours playing wide.
Fundamentally, these are two trees that play with one of the game's core resources: Tradition is all about food. Liberty is all about production. It's a policy tree structure that will inevitably favour Tradition, because food is the more important resource (and more food = more citizens who can be turned into more production at the click of a button. The converse isn't true - you can't turn production into food except with three buildings very widely separated on the tech tree, and which cost maintenance, two Wonders which you may not get, and food trade that has to be unlocked with trade routes and granaries and cost you the money-generating trade a wide empire so desperately needs before it hits a critical number of city connections).
As for the Great Person, it's timely to get a GS at that point, or occasionally a Great Prophet, but would you trade the ability to buy unlimited GPs later in the game with faith for the ability to get one early GP as a one-off? And what is the Golden Age doing for you at this point in the game? The key advantage of golden ages in the past was the increased tile yield from tiles that already produce gold, but tiles don't produce gold now without certain luxuries, and you want to get Representation long before you having trading posts or the Colossus, or even markets to multiply the income you're receiving.