We decided not to encrypt the user information for multiple reasons; user friendliness, data recovery and naivety. The internet was a different place back in 2008 (Opera 9.50). Both me and the other guy used the service our self, and was paranoid about the user data. Only we had access, and only we would see user data while fixing bugs.
I especially remember one bug where the database suddenly started growing faster than we expected. The frontend servers started eating more and more memory. In the end, we discovered that a larger porn site network had started serving their full size images as favicons, and that Opera Link had started syncing multi-megabytes of Base64-encoded favicons in our already bloated XML protocol. That was the first time I was introduced to 'Rule 34'.
We maintained the control over the server side and userdata until the end of the Opera Link project. We where never asked to turn over userdata to the company, except for aggregated stats for speeddials (only top X lists, not including unique URLs).
After we had announced the end of Opera Link, the userdata was scheduled for deletion, but we had to shut down the service a few weeks early, after a sysadmin started dban on the userdata mount instead of the local disk ;-)