Part of the concern is your average joe who doesn't read the ToS or understand computers might assume that their private Dropbox.com folder is exactly a compute

Part of the concern is your average joe who doesn't read the ToS or understand computers might assume that their private Dropbox.com folder is exactly a computer analogue of a physical private folder where you drop your physical files from your physical desk, which then does some computer magic to sync them between your work and home desk.