If you boil it down to typing LFG for X, sure it doesn't seem social. What it does, however, is get someone to invite you, and to start talking. Old WoW dungeons were rarely ever quiet affairs. People talked throughout the experience. Part of why is linked to that initial ice breaking moment when you go through that typing based ask and invite phase of the grouping encounter.
The dungeon finder's implementation represented the first time I ever encountered a quiet group. It also represented the first time people blew through dungeons like they weren't there, just an unending stampede toward the boss. So, while I do think the dungeon finder prevented that ice breaking situation, there's another component here. The dungeons could be blown through without much thought. They no longer required communication. There's a variety of reasons for this, but the end result is that dungeons just became quieter experiences.