Thanks, Dave. I understand your concern. The practical implications of their privacy policies require research into the history of data loss and privacy breaches of 1Password.
What I do know are two things:
1. 1Password is being political about their issues and ignoring some users from reporting their app's bugs. Check out this Reddit post.
2. Their use of our data (as shown on their AppStore page) and not being clear about why they need it and how it helps the user experience.
One of the problems with Password is that it's not apprehensible for ordinary users to figure out how and why their personal data is collected.
Many apps nowadays write about their privacy policies as vaguely as they can. It's beneficial for companies when they write about how they collect our data, and simultaneously, the user gets frustrated by sophisticated writings on their privacy policy page.
I praise Apple's move toward privacy; It's more user-friendly for people like us to figure out what data an app collects. I remember the great Steve Jobs once talked about privacy, saying that privacy is about asking people what you will do with their data and asking them repeatedly.
With that mindset, I'm more focused on my app reviews. I look at how much data an app collects and also are those data personal or not.
I understand your argument about how apps encrypt our data on the cloud, but in many cases, the encryption keys are handled poorly, and the supposed "encrypted" data on the cloud is not safe. The safest way to secure your data is to locally store it on your machine. Unfortunately, that's problematic due to the way apps synchronize over the internet, but we don't have much choice other than gravitating toward apps that do two things:
1. Collect as little data about us as possible
2. Clearly explaining in plain English what data they collect and why they need to do so
I suggest reading this article from Wired about the security of Telegram; especially its unprotected nature in messaging:
https://www.wired.com/story/telegram-encryption-whatsapp-settings/
So far, Apple's approach to forcing every app on the AppStore to report what data they collect is a significant first step to helping ordinary people understand if they are paying for a product or they are the product.