Telegram offers encryption, and the client is free software. Anybody can
check if the encryption is done properly.
If you send your data to another persons server, it's not under your control
anymore, no matter what kind of software is running on this server (after
all, you will never find out if they really say the truth).
Now, it would be better if the server side was also free software, because it
would be possible to set up our own servers and not be dependent anymore on
telegram.
However, just because they didn't provide as much as free software as we
hoped for, we shouldn't blame the developers.
They *did* develop free software and we should be thankful.
We can't blame people for not releasing code for software that they never
even released. It's not that the server software is proprietary in the very
sense - afaik, it wasn't released at all.