A rather good write-up, though I'm not convinced the author's points justify the "Megabad" in the title. The decisions made are not always the most secure, but in general appear to be reasonable given the nature of the service - i.e. that this is material meant to be shared not just backed up.
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Indeed, by just reading the title I thought the encryption is already broken and useless. It's just a filesharing site and not a secure and personal backup space. (I'm sure some guys will use it as their only backup like it was happening with MU though).
They advertise themselves as "THE PRIVACY COMPANY". Any problems with that image should be exposed and shamed.