Encryption also adds significant overhead to file read / writes which people
on slower computers can't really afford.  As for booting from a USB drive,
there's a huge difference between a family member (if we're assuming that
usage scenario) doing a computer wide search and turning up a private email
or diary entry or something, and someone maliciously booting off a USB-drive
expressly to gain access to your files.  Finally, if you're already offering
a psuedo-fix option during the installation process, why not add a real
check box that says
"Allow all users view the contents of my home directory."

I think you'd be surprised by how many people uncheck that.

-- 
Home permissions too open
https://bugs.launchpad.net/bugs/48734
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