Hi Dropbox, stop blaming users. You are in the strongest position possible to offer encryption in Dropbox because it's your software. You know the triggers that cause files to be exchanged. You know the optimal way to minimize network traffic. If you can send and receive files, then why can't you also encrypt / decrypt files in this step? This could be as simple as providing a settings screen where the user enters a passphrase and once enabled all files within a protected folder are encrypted before they leave the client. This encryption could also scramble file names and break up large files into parts to obfuscate their size.
Yes you'd have to warn the user that a protected folder means exactly that and there are restrictions on what you can do with it, e.g. access in some dropbox clients, web browsers, sharing to others. People will get it.
Even better, this encryption / decryption could be thrown open as a pluggable API so 3rd parties could write their own encryption protocols to whatever personal or corporate standard they desired. For transparency the aforementioned passphrase encryption could even be supplied for review.
Same goes for Skydrive, Google Drive etc. There is no excuse for not offering encryption. Not that I'm in the tinfoil hat camp to think this is to facilitate monitoring (although it does). More likely it's because these cloud storage servers use file hashing to spare themselves the bother of storing 1,000,000 copies of the same file. It still sucks though and even if the option is off by default, encryption of at least one folder should be provided.