[dspillett]

While leading the user to think they are more secure than they are is definitely a bad thing, you are right there. If we are honest about the level of security offered (a message to the effect that "this will only deter opportunistic viewers, for full security please use a proper encryption method" - or how ever you'd word that for the man-on-the-street)then user will either find an alternative or decide it is worth while (or decide they don't care).

One thing that makes this "security" better than no security at all is that the reader has to purposefully takes steps to read the content so they can't try use any sort of "I saw that information accidentally" defence if called to task about knowing something they shouldn't (or passing that information on to someone else).