Why do you use Telegram if you're concerned about privacy?
It's not as faulty as it used to be, but I see the old times made a reputation for it.
I am aware of that, though I think in the second case it's better to pretend messages are not encrypted at all on the server side since mere storage encryption can be circumvented all too easily.
Anyway, having the choice between encryption and no encryption is exactly the problem. How many Telegram users choose e2e-encrypted chats? AFAIK you have to enable this for every conversation separately, right?
It's their approach and I'm personally ok with it. Due to my friends I use FB messenger a lot and they say it will take years to be e2e encrypted, so I believe it's a fair compromise from Telegram.