That's a severe oversimplification, IMO. Just recently there was news that duplicating the host_id from the Dropbox config onto another system will immediately gain access to all of the Dropbox files associated with that host_id, without further authentication.

It's not security theatre to acknowledge that the security in such a system could be improved, especially as an option for those that require it.

#3 could easily be paralyzing for many businesses. There are already services (like Tarsnap) which are engineered to not require you to trust them; why should we ignore such services and limit ourselves to doing business only with those companies that we can trust implicitly?

As a specific example, I've had a client for a few years which is government funded and quite paranoid about security. However, they also need to communicate with outside contractors. I don't advise them to "trust" their ISP, the outside contractors' network, and all the other businesses in-between. I tell them that nothing sensitive leaves the building unless it's been encrypted, and that once someone else opens that file, it can no longer be considered secure in any sense.

"Trust us" is not a compelling requirement for doing business, nor can businesses limit themselves only to relying on service providers that they trust. Fortunately, the technology exists now to eliminate that requirement.

Dropbox is currently off-limits to all employees at my client.