in terms of end-to-end encryption, what kind of client-encryption do you have in mind? usually, this involves steps that regular internet-users are not able or willing to handle. that's why i think such a service might be a great thing.
to your second point, how would you ever be able to proof that?
which other alternatives are there you are talking about? i would like to have a look at them.
in terms of trust, lot's of people put their data on facebook, so there is that... specifically for you, would it help if you can audit such an application?