Dropbox is incredibly easy to use, that's where its power comes from. It's "secure enough" for casual use.
Additionally I believe you can't share data between users with tarsnap.
There is a market opportunity for a corporate-level secure data exchange infrastructure.
That's besides the point. Tarsnap is more than useable enough for its target audience, which is why cperciva (rightfully) doesn't give a rat's ass about making it as user-friendly as Dropbox and its ilk.
The two issues are completely separate. Implementation of client-side encryption and user-friendliness are not mutually exclusive. Tarsnap is simply proof that client-side encryption is entirely within the realm of possibility for cloud-based data storage services.
The overall design, including how it is possible to do secure delegation, is fairly well described in a paper from the 'Storage Security and Survivability 2008' workshop - http://tahoe-lafs.org/~zooko/lafs.pdf