[brown9-2]

I think some storage providers might not be comfortable with the situation where they'd have to tell a paying customer that they can't help them at all when the customer loses the key - they choose simplicity as a feature over appealing to the security-conscious.

As for Dropbox, they need to be able to read the files to serve it to you from their website.

[nkassis]

Can't they implement client side encryption? A javascript based encryption mechanism could be interesting.

[lukeschlather]

And completely unusable for the average consumer (needing them to keep track of their key, and somehow secure their key, and somehow pass their key to every browser they use.)