And anyone who is stupid enough to encrypt their wallet with an 8 character password before broadcasting it across the internet is likely to end up with their password bruteforced and their coins stolen.

Agreed. Not only are you placing complete trust in these centralized cloud servers much like you have to with centralized web wallets and exchanges, but once any data is uploaded to these servers you have to assume it will never be deleted. All my back ups are created manually, offline, encrypted, and stored in physically secure locations. It's not as convenient as using DropBox or iCloud, but I know my data is never going to be involved in one of their many many leaks, hacks, or breaches.