Wish you didn't now require access to my contacts...have not updated because of this.
There is nothing new here. As you've seen in last version, the app was still able to get details about the contacts that you've added to the game(when hosting).
The new permission was added simply because HTC and Xperia phones use roms that crash when you try to present the dialog for selecting contacts(without READ_CONTACTS permission). If you are not conviced you can google this issue or verify the reviews for the previous version of SpyFind.