Aren't there MASSIVE (read: showstopper) complications when you want to use FHE for "looping" computations?
I always thought FHE was only good if you can fully unroll your "fixed-length" computation, and even then you can only use each "program" once without compromising security.
Under that assumption, general purpose differing-inputs obfuscation cannot exist.
The way I understand it, FHE being applicable to anything other than "unwrapping a path through a circuit" seems implausible. Any claims of arbitrary encrypted computation should be viewed with the highest dose of skepticism.
Every time you want to run a computation on your FHE-enabled VPS you would need to upload data proportional to the maximum number of operations in the computation. Otherwise, re-running the same computation with a different input gives away information about both of your inputs and about the computation.
The paper at http://www.shoup.net/papers/helib.pdf should give you an idea of what goes in a HE scheme. They also report performance of multiplying two 1024x1024 matrices: 473 seconds.
I always thought FHE was only good if you can fully unroll your "fixed-length" computation, and even then you can only use each "program" once without compromising security.