I assure you the mechanics of how the data is stored is not of interest to 99% of people. Nobody really understands encryption anyway. Or is this site exclusively for geeks?
Obviously, no security is perfect, and given sufficiently evil central repository you'd still end up a situation of mistrust. But rather than take a chance with my private information simply because the people holding it tell me they aren't evil, I'll take responsibility for my own data and do my best as a user to make the right choices about how to treat that which I desire to keep private. If that means being picky about what I share/post, that's fine. If that means I need to run my own host and control access myself, well that's the burden I can choose to take to give me the peace of mind I'm looking for.
Additionally, if done right, the users do not need to know a whiff about encryption. I'll point to "https:// as a more successful example.
(Though HTTPS isn't exactly an unqualified success. Most people don't understand what it protects or notice when it isn't there.)
surely there is a great market share for ubiquitous encryption.