Great idea. I think that's actually preferrable over simply protecting one folder and it allows a more secure environment in a shared (networked) environment as well or even a multi-user setup. When unmounted it's also just an inconspicious dmg file!
BTW, one can also prevent a file from showing up in Searchlight in it's preferences, and also shell in and change the folder name to start with a period and you can also "hide" it in the GUI (assuming you have control and don't allow system files to display). Just some extra tips that don't encrypt or protect, but simple enough to "hide" from most.