I understand what you are saying, and that is a somewhat plausible story. Another one is that search is more difficult.

But the reality is I think for any company with serious security policy will have to pass on a service that only "sort of" secures their files.

There are a lot of people also who will not ever consider going with dropbox because they have on their board (Rice) someone who has a sordid track record when it comes to warrantless wiretapping, torture, and so forth.

In my opinion dropbox is OK for sharing docs between 2 people as long as the doc is not something you consider private. If you want privacy though (business files/docs/artifacts), best to pick something else.

There are methods of client-side encryption that still allow for deduplication.

For example, use a hash of the file as the encryption key, then encrypt that hash with the client's key.