It's signing the images, not encrypting them. This isn't attempting to deny you the ability to see the pictures. Instead, it's supposed to demonstrate that an image wasn't modified after acquisition. I think it essentially takes the pixels, calculates a signature, and then stashes it somewhere in the jpeg/raw header.

I can imagine some non-evil uses for that, like crime scene or insurance photographs. Heck, it might even be useful for online selling (here's an unretouched photo--look, no scratches!)

You're right that it's tricky to protect the signing key from a-user-who-is-also-an-adversary though.