After the recent revelations that the National Security Agency was tracking cell phone traffic and emails, I think we have to realize that regardless of your political stripes and of how much you trust your government or a foreign government, anything that is out there in a public or semi-public repository is vulnerable. That defines the cloud.
And, from what I understand, the NSA’s snooping was not restricted to servers in the US.
Whatever you may think of Edward Snowden, there is likely more than one of him working in trusted positions who may share confidential information for his own reasons. So, all that is needed is one person with that kind of access to be a little less scrupulous than the average spook, and your data could be in the hands of your competitors, yours government or a foreign government or tax authority, or anyone.
While that might be fine for pictures of your cat, your iTunes library, or your social calendar, I’m not sure I would want to have all of my company’s work instructions, customer complaints, manufacturing methodologies, working formulae, and financial data out there.