1) Same as the above poster. This is not good for sensitive info, which is pretty much the only stuff sent by snail mail anymore anyways.
2) The main purpose of this, as I see it, is to cut down on paper usage. I can't see anybody actually caring about paper cuts or having to recycle it. I can see people using it to try and save a few trees, but USPS will print out the electronic message and mail it to the recipient and that other company still receives paper copies of all of your mail, so no paper is saved using either of these tools.
gm0n3y, I'm using PostalMethods (www.postalmethods.com) which are HIPAA compliant meaning only machines are "reading" my letters until they reach the recipient.
Regarding saving trees, you are right, the letter is printed and an envelope is being used. However, PostalMethods prints the letter in the nearest location they have to the recipient and so saving damage caused by transporting the letter. It's not much - but it's something.
I think postal mail is gathering a cult following. It has now become a cool and trendy hobby.
I am a member of Global Penfriends.. they have penpals all over the world that correspond by the written letter. They also offer a service to print, stamp and send letters to any of the penpals in their club.