Founding engineer at Skiff here.
>From the white paper, it appears as if this system requires its users to trust the server. That's not end-to-end encryption. What do I have wrong here?
It doesn't. All data is encrypted client side across all apps - Skiff Mail, Drive, Pages, and Calendar. For sending external, the whitepaper is very clear how this case is handled in section 8.2 as securely as possible (without having PGP in place. Though this is something we are looking at based on community feedback).
>Further, it looks like the email encryption provided by this system only works between users of Skiff. At that point, why use email at all? Why not use a real secure messenger? Instead of building an "encrypted email service", you could literally just build an email-flavored frontend to Matrix; either way, you're proxying to SMTP, not speaking it directly.
Lots of folks are sick of getting sold their data sold based on their email. Even corporations are sick of largely giving more information about their customers to Google even notoriously Amazon that stopped sending purchase receipts via email.
So even if not end to end encrypted, we do encrypt the emails with the recipient's keys ensuring that only the recipient can access this data. This is a strong privacy guarantee not just backed by a flimsy privacy policy but actual cryptography.