Why? Because all forms of powerful server-based crypto rely on software-based crypto. The problem with this is they need the private key of yours on the server side, somewhere, from the whole thing to work. This means the server operator can recover the key from a running operating system, easily (through system utilities) or forcefully (reading it out of memory with specialized programs), or just writing code to fool you into enter the passphrase and storing.
If you have heard of host-proof systems, they indicate (I would say correctly) the only way for crytography on network service like the one offered here is the data is encrypted on the client and sent to the server, never ever will the passphrase see server receiving the data. Therefore, not even the service provider can crack it without the same effort as some adversary from outside the system.
That being said, I could have read too much into.
It's got some way to go, but it's certainly possible.
great example i saw floating around here the other day: http://privatecore.com/