|They're close friends (he didn't add a "san")|
Among private friends it's much more relaxed. Calling someone by their family name and "san" is not really wrong, but can be seen as a little too polite and putting some distance between you and said friend. For really close friends you can drop the courtesy suffix alltogether and even call them their first names (although this should be agreed upon beforehand as it could possibly offend some people if they don't consider themselves as close friends as you thought...).
Last night, I met up with my old buddies from the previous consulting job, the Boy and Luke whom long-time followers of this blog might be familiar with since previous posts. The Boy was on a temporary visit back to Tokyo so we squeezed in a dinner to catch up on stuff and share some old jokes about the insanity of the office we lived through in the consulting world. The Boy shared a story that I found quite amusing and I will do my best to retell here.
His older sister got married to a Japanese guy a few years back. The Boy has been getting along well with his brother-in-law, sometimes meeting up for dinners without the sister and generally striking up a friendly relationship. All these years, The Boy has been addressing his brother-in-law with the polite form, calling him Murata-san while in return being called by his first name only without any courtesy suffix. This can be seen as somewhat acceptable as the brother-in-law is older than the Boy and as he's married to the Boy's older sister he does not need to extend the same courtesy to the Boy.
However, during a dinner they had together hanging out, the Boy had started to feel a little weird about addressing him as "Murata-san" as it creates a feeling of distance and the Boy thought that by now they had become such good friends that he could do a little more relaxed approach. So he very politely suggest to his brother-in-law that maybe he could start addressing him as "big brother" (onii-san お兄さん) instead if he would be ok with that. He was met with a few seconds of silence, a cold stare followed by "No, I prefer if you address me as Murata-san". Awkwardness followed and the conversation never really recovered after this for the remainder of the dinner as the Boy's attempt to close the gap between them had been quickly shut down with no room for negotiations.
Let that be a lesson to you all.
(Does anyone know how to get rid of the double-line breaks that seem to be the default in blogger now since recently... It's really annoying me...)