We have talked a lot about solutions like this, but most of them end up more trouble than the encryption proposal. For example, developers need to link back to your profile page and your friends' profile pages in their UI - do we change all those URLs individually for all applications, too (since they contain a user ID)?
I think it is a clever idea, but it ends up breaking down in a lot of ways, and it has the bad quality that it is not backwards compatible with existing applications.