But my inner policeman hesitates. If actual bad guys (organized crime, drug cartels, spies, terrorists, governments, script kiddies, or anyone else working outside the law) can communicate and operate with impunity, the technology is not an unequivocally good thing. The broadly accepted way we deal with this is to have warrant-based interception and eavesdropping; it's hard to argue that our law enforcement services would best operate without any tools other than direct physical surveillance. So presumably even Mega would need to comply with legal wiretapping requests. Happily for Mega, and unhappily for law enforcement, doing it at the server doesn't get them anything with this scheme. But that simply compels law enforcement to get much more invasive, in a way that's hard for citizens to monitor: Find a way to install eavesdropping tools on the suspect's machine so access is gained before encryption.
I'm not sure where all this is headed; it's a brave new world.
(Heading off potential replies about the growing use of warrantless wiretaps -- of course those are unacceptable. But wiretapping with a warrant is a vital, crucial tool, and that's all I'm discussing here.)