Why I'd never use this...
First; the intended principles on privacy and such don't really matter at all; its the reaction which follows when those principles are being put to the test (think requests from the government and other agencies), that's what matters. Unfortunately it's something a lot of companies fail horribly at.
But there are also some other issues.. First of all they're hosting with Amazon's AWS. And what does Amazon tell us about the data on their systems? From the AWS customer agreement (3.2):
Amazon has centres in multiple regions; but what's legal in one part of the world can be illegal in another. Do I see a major loophole here? Guess I do.
So what does Lavaboom themselves tell us about this? Well, unfortunately not that much. I see a lot of "privacy, security, blah, blah, blah" but no where on that site do I see any disclaimers which tell me exactly what they're going to do with my data. What I mean with that?
They'd like you to subscribe to something. So what are they going to do with the name/e-mail combination? Where are their commitments that this (small, sure) bit of information stays private and won't be sold to 3rd parties for commercial purposes (to fund their project for example)?
Most companies, even Google which I don't trust at all, have clear written out policies which can tell me exactly what their stance on my data is and how they're going to treat it. And this firm, which preaches security, has nothing of the sort?
Needless to say; that doesn't make me feel secure at all. On the contrary; missing out on information like that makes me convinced to be dealing with a poor attempt at marketing. They claim privacy but fail horribly at something just as important: transparency.