This seems like a really big argument for never allowing your data to be stored by a 3rd party. Does anyone see any reason why these companies should do anything other than store the data locally on your system, encrypted/obfuscated, and then only ever send once, via encrypted connection, and then immediately delete the info remotely? I mean, if someone breaks in to my house and steals my PS3, they already have acces…
Much of ecommerce would go down the drain, if they got rid of remote storage of your details. No recurring billing, no "One-Click", no address books, etc...
Either that, or perhaps there could be statutory penalties for data breaches. For example, if there was mandatory compensation of, say, $100/person for a data breach, companies might be incentivized to better think about whether they really need to store this data, and whether they're storing it safely.