You're misunderstanding the concerns raised further up the thread. It's not insane to think that putting sensitive materials (which, presumably, your password database is) on cloud services is of questionable judgement.
There are also orders of magnitude more shoddy implementations of encryption than sound implementations (even if the underlying scheme is solid). Relying entirely on the security of someone else's encryption (especially if you don't have the understanding and ability to verify it) is very naive.
Putting these two observations together is hardly limited to the mind of paranoiacs. If you want to blow this out of proportion by comparing it to aliens, memory scraping, and VMs within VMs, then you're being intellectually dishonest.
Putting sensitive stuff on Dropbox is like storing your lockbox full of valuables at Joe's Totally Trustworthy Free Storage. You may trust your lockbox enough as an additional layer of security at your home, but do you really want to leave it in someone else's unmonitored possession?
I'll never understand why people are so blindly trusting of people they've never met and treat even the slightest bit of skepticism as paranoia. There's a world of difference between not being a gullible chump and hunkering down in a boobytrapped bomb shelter.