1. "No way to tell whether the provided source code matches the provided firmware"
Yes there is. See point about hash checking. Even firmware can be hash checked if the architecture is correct..
2. binary code will vary depending on the specific architecture, optimizations, and libraries during compilation. 2) a hash can be falsified as easily as a binary.
See point about using P2P technology to validate hash rather than central servers.
3. At least an order of magnitude less effective than open source, and we've seen that even "important" OSS like openssl can go decades without independent code review.
If apps are isolated from OS this can still be largely mitigated. (other than bugs in OS and firmware). Obviously until the day comes software is sophisticated enough to find all possible security errors zero day exploits will be a problem.
4, people will get frustrated when they lose their private key, and 5 years of family snapshots disappear.
Minor issue, Biometrics can be used to get around this problem. Furthermore if someone is too lazy to that one day they might misplace their keys they have no one but themselves to blame. Absolutely no different than users that don't bother backing up their data then complain the computer is somehow to blame.
5. Because you'd rather trust 1000 amateurs to secure all of their systems than one professional to secure his server
Absolutely yes. Your flawed assumption is that everyone is an amateur. The more eyes get to see the code, the more trustworthy it will become when experts also review it. Obviously there will be things that slip through but P2P based security is highly preferable to servers (which already know is a big fat target for intelligence agencies). Far harder to break into 100,000,000 systems without anyone noticing than just 1.
6. "Yeah, ranks right up there with executing journalists and kidnapping babies."
Mockery like that suggests you don't really see privacy as a human right. It is. And it has very real consequences to freedom when we don't have it. As for your ad hominem.. you destroy your own credibility.