JERRY KINDALL  I installed it quite a long time ago, and haven't been to the install page recently, so I guess you're technically correct -- the best kind of correct!

It does look like they now have some backup-ish features, such as the ability to restore deleted files and to retrieve previous versions. I am pretty sure they didn't have these features when I first started using it, and it never occurred to me to look for them. Mea culpa.

I suppose it could make sense to use Dropbox as a third-tier backup service, supplementing your own local and off-site backups, but there are far better choices for that. Some of those services offer unlimited storage, too -- not that you'd want to restore your entire system from the Internet (it would take me nearly a week, and I have a 20 Mbps service), but it certainly beats Dropbox's maximum of 50 GB.

Really, the main feature Dropbox offers is synchronization, and it excels at that. I often use it to share files I'm working on between my desktop and my laptop. (I also have all my desktop wallpaper in it, and a bunch of e-books.) But if I was suddenly unable to access the service, I wouldn't lose anything, because there are no files that are stored just "in the cloud." All my Dropbox files are stored on three computers I use on a regular basis anyway.  
(Version 0.6.507)

JERRY KINDALL  Dropbox is not a backup service. If you want to use it for backups, there is a very simple workaround for the issue you raise: don't!

If you actually take a moment to look at the Dropbox site, nowhere does it mention backups. Instead it talks about synchronization and sharing. And lo, verily, the purpose of Dropbox is to synchronize files among multiple machines -- including one owned by the Dropbox operators, i.e., a Web site, from which they can (optionally) be accessed by others.

The verbiage you object is obviously intended to address abuse of the service (for example, using their Web servers to share a pirated movie with a few thousand of your closest friends). Your "invaluable data" would of course still be safely stored on the various computers that had been synchronized to your Dropbox account before you did whatever it was that caused them to kick you off.

Also, of course, they reserve the right to go out of business at any time, like any good Web 2.0 startup, so your access might go away even if you didn't do anything to raise their ire. I'm not sure what they could do about that -- promise that they'll never die? Obviously, the same thing could happen to Spiderpig or whatever. You still need actual backups, backups that you control. A "cloud" backup is not a backup, it's just called one.  
(Version 0.6.507)