I'm not sure I understand how this new website is any different from the hundreds of others such as rapidshare etc.
The only thing I see that looks new is the encryption, but surely anyone who doesn't want people to look into his private data can either encrypt them and then upload them, or simply rar-password them.
It's not something that people who cared about the privacy of their data were not doing before.
It appears that this is now done automatically by that website, but it doesn't mean everyone will want to go through that process. What happens if you want to share data with colleagues etc? It just gets cumbersome.
All in all, it adds a feature that most people don't really care, and those that do already had a process in place before it.
The only differentiator I see is a the big advertising campaign. Given that the site is owned by someone who is under conditions from the court which could see the plug pulled on the site quickly, I cannot understand why anyone would rush to upload their data to his website. He clearly has no credibility when it comes to such ventures given his prior record and there is no way that any serious business would trust him with their data continuation plans.
So, overall, we are not talking about anything new here, just another file host as all the rest, and from an ill-reputed owner to boot.