Hacker News is a tiny audience. I don't see any business sense in focusing on features that 0.1% of users want.

Not to sound self-righteous, but the HN audience (or more plausibly, some subset within) has a high influence on what the rest of the world sees and wants.

Any Dropbox employees read HN?

I think this is exactly the direction they should take.

If they did want to serve this audience, they would actually want to make it easy for someone (possibly the employees themselves) to build a Free encryption layer on top of them.