better to delete it than hand it over if privacy was your selling point in the first place. if i were a customer, i'd be ok with this.
Based on the fact that a number of them are talking about having lost data, I suspect that at least a significant number of customers only used webmail to access their accounts, so they never had a local copy of their data.
Which will still see your data unencrypted. And there are open-source browsers too.
In any case, as I said several posts ago, a number of Lavabit customers were complaining about having lost their stored emails; if they were using a desktop email client with IMAP, that wouldn't be the case.