Talk about leaving the keys in the house

Literally, this is what a lot of backup and folder sync providers do. Most backup providers may offer "military grade encryption" but it's often pointless because how it is setup. Encryption (and the keys) are usually tidied down to the login credentials. So break into the account, server or a nosey server admin wants to look in, it renders the encryption useless. It's a bit like locking the house door but leaving the safes keys inside.

Solution? Encrypt data client side so even if you break into the server all you get is encryption files. To decrypt you need the software, software license key (maybe), username, password/api and the decryption password. This is a very easy, fast and cheap way of securing cloud data. So instead of using Mozy, Carbonite, DropBox - get your own cloud storage space and use 3rd party software to upload file and encrypt them locally.