Unfortunately, we don't have a way to let you encrypt your data and then upload it up yet (but have a few ideas on how to make this work for the future). Besides, if you did encrypt all your stuff, you wouldn't be able to take advantage of all our media features like video/audio streaming, photo/doc viewer, etc. :).
Fair enough. But you should probably reach out to Lifehacker with a correction to their article. While you guys might not be responsible for what they write, that post is basically an advertisement for your service. Any customer who make a purchase assuming the service is as described by Lifehacker will end up disappointed.
You'd charge me only $20/month for media storage+streaming and I'll probably only be charged perhaps $30/month from a cloud provider. $20/month for the server just being on and maybe another $10 for the bandwidth of the static files(which would be mostly cached client side after the first couple of heavy usage months).
Maybe another $10 or $20 for the CPU time to make a couple of url-routing decisions server-side; have to maintain my own database of users too.
Probably still much cheaper than whatever twitch.tv currently has to pay.