I guess it depends on what you keep in your notebooks. Business notes in the cloud, fine. Personal stuff I keep notes on -- medical history, financial info, etc. -- all in the cloud, possibly encrypted with some key owned by MS also in their cloud, living forever? Nope.
Don't be silly, local notebooks are a really useful thing when flying and when out of range of cell service (like camping, which is a great time for continual thinking without distraction). Without a capability for offline notes it will be less useful than if it had that capability.
> Not sure how well the merges work in practice, though.
Not too well in Evernote has been my experience. It seems like every time I work on something offline for any length of time it gets into a manual merge bucket.
Of all the things I would not want spooks snooping, my meeting scrapbook is pretty low on the list.