Once again, it is the open and honest user who is close to an edge case who gets caught up.
I understand why people call for this, but it's really a very narrow window of "security concern" where that's a valid feature.
Much better would be an open API, and an open source client, which does the encryption, preferably not even technically affiliated with the cloud provider.
The author of that code is the FreeBSD security officer. He is also the author of my favorite comeback ever on Hacker News: http://news.ycombinator.com/item?id=35079
(Or navigate up to http://news.ycombinator.com/item?id=35068 and get some context. cperciva really is impressive.)
During installation, Dropbox asks the OS for an encrypted read/write view of "/home/user/Dropbox". The OS confirms this with the user. The user sets up the key/password for that encryption. Done.
If Dropbox is compelled in future to try and gain access to the unencrypted view of that same folder, it would have to ask the OS permission, and the OS would ask the user.
Dropbox could also ask for an unencrypted view on the initial installation, but the user should still be allowed to specify that the view it gets is of the encrypted versions of files only. This would be entirely transparent. Dropbox would have no idea if it's getting the full view or the encrypted view.
Others have them, but as long as you don't use the content PUBLICLY, they don't enforce, which is exactly correct.
Edit: sorry, reread. You are right about the encryption part. I still stand by the rest :)
- Childporn; pictures of very young children are stimulating to perverts and while there are definitely very 'wrong' pictures in this category, there are also just pictures you took of your young kids and have in your private folders ; that's not childporn UNLESS a pervert gets his hands on it. Meaning when it is private and yours, it should not be removed. It's memories of your children who naively play in the garden forgetting to put their pants on (I wish I could do that ffs) for instance. In the wrong hands dangerous, private and not shared; perfectly normal.
- Pirated movies; at least here you are allowed to backup movies you own, again if they are private, it cannot be that your account is removed for this; you HAVE the DVDs in your home and you ripped them in case of fire or when the break (and they often do after many years).
Both are crap arguments for removing accounts or even data UNLESS they are made public.
Hence it can be solved very easily ; just scan public dirs.
Bonus: one user, 'sickness', showed how to replicate your encrypted data across Dropbox, gdrive, etc. http://www.sickness.it/crazycloudexperiment.txt
He's a crypto expert, so you should check out his service.