According to the article:
Actually Dropbox has merely aligned its terms of service with reality. If you have your stuff in a safe deposit box, law enforcement can go in there to with a "valid legal process". Or they can take your hard drive with a "valid legal process". Law enforcement can also dig up your back yard with a "valid legal process". As for me, I don't have any state secrets stored in my Dropbox. Anything stored in the cloud is vulnerable not only to "valid legal process", but to anyone who finds a way to hack into and decrypt any data you store in the cloud. That's a good thing to remember.
With the new terms of service, Dropbox now says that it will “United States law enforcement when it receives valid legal process” and may, if necessary, decrypt the files in private Dropbox folders, allowing them to be read by government investigators.