Assuming this is true, how much is control rights vs need for de-novo architechture?

I'm not sure if I understood the question, but if you mean how user control is related to the decentralized structure, then the answer is in the question. Decentralization essentially prevents one entity from being in control, and in edge case control is given to a user who runs a personal pod for single Diaspora account.

About the notion that the data needs to be locally stored/controlled/at the edge. What about the idea of encryption and/or persistence management? (user control)

Does this provide more flexibility on Architecture.

Edited: for clarity.

I think encryption is good to have and D* devs had it in some further plans. But it's probably not the first priority, until federation protocol is rock solid.