Earlier quoted context omitted.
Which is what we thought was happening with Dropbox and why people were up in arms about discovering that it wasn't the case. There remains the space for a cloud sync service that encrypts client side and provides good enough clients for every major platform. Spider Oak comes close, but it's just too damn ugly an interface and isn't the "Install and forget" option that Dropbox is.
Who thought that was happening with Dropbox? Did they ever make the claim that they would encrypt people's data?
However, I also know that since their website allows me to access data and reset my password, their key management doesn't prevent Dropbox employees from viewing my stuff.