In the street vs On the street

In the street vs On the street


The preposition I always use is on:


The shop is on the street. 

I live on M street.  

There are people on the street (meaning there are people outside). 


The only case when I would use in the street is when I refer to someone/something literally being in the street (where cars drive). A while ago I was corrected by a friend, who told me that I should use in.  The shop is in the street.There are people in the street. I live in M street. Then today I was rereading a passage from a book I had read a few months ago and this time a sentence caught my attention : " The theater was in the street..."   I clearly remember people in DC using on. Needless to say, I am confused.  Prepositions cause me a lot of headaches especially when I have to write something.I would appreciate it if someone helped me clarify this problem. Thank you.