No, client-side encryption makes sense even if you have to trust the server. When Mega's server gets compromised, the attackers cannot get a user's private key

No, client-side encryption makes sense even if you have to trust the server. When Mega's server gets compromised, the attackers cannot get a user's private keys until he visits Mega's site. Without client-side encryption, attackers could get all the user's keys and thus all their data immediately.