They get shut down for copyright infringement and immediately come back with a service touting a privacy system. Privacy from whom?
At Megaupload, your files were private from other people. Mega themselves has/had no interest in snooping through your files. Various copyright enforcement agencies are very interested in ensuring that users are not violating copyright.
There is nothing about their system that is less secure than Megaupload was. In both cases, everything goes over HTTPS. The only new addition (no matter how broken their system is) is that now Mega cannot be reasonable expected to monitor file upload content, or provide third parties with the ability to monitor content.
I'm not so sure using encryption just to eliminate liability for themselves would go over all that well. It makes sense to me that they would lie about the purpose.
Certainly if they are advertising security for end users, they should deliver it properly, but honestly I doubt that is their actual intent. This seems to be the sort of 'security' that only needs to be strong enough that they can say with a straight face in court that they cannot break it themselves.
