Mark MacLeod

The "tradeoff" seems to be "make the server into a
dumb store for encrypted data." At which point, you
don't have Evernote (an API for fuzzy-matching
clippings punted into it from various devices),
you have Evernote (a set of fat client programs)
plus a POSS (Plain Old Storage Service, like S3.)
In fact, the workflow sounds like it would have more
in common with editing a Word document over SMB than
with making web requests.

Not at all. Fuzzy-matching can be done client side just as well as server-side. The constraints are a bit different, but not too much (E.g. on the server-side: Make it scale --> conserve CPU, on the (mobile) client-side: Make it fast --> conserve CPU)

Otherwise, yeah most Web Apps are nothing more than editing stuff over the network and visualizing it differently.

The #1 competitor or a SaaS isn't some other SaaS but rather Word/Excel: http://www.startupcfo.ca/2011/05/the-1-competitor-for-saas-vendors/

Edit: Also there's no reason to believe the client-side store wouldn't be encrypted. That'd be exceedingly stupid.

Working on answering my own question here, in the hopes that this may help someone else down the road. Here's one article that argues against startups going down the "white label" path:

http://www.startupcfo.ca/2012/06/why-i-hate-white-labeling-for-startups/

And another that takes a dim view of pure "white labeling" but suggests co-branding as a valid option:

http://davidcummings.org/2011/08/11/white-labeled-software-strategies-for-startups/