This question is obsolete. Starting with SDK 1.5 packages are no longer encrypted.
Turns out Azure role service packages are encrypted so that once a package is produced only Azure runtime can decrypt it.
Good, but as Bruce Schneier says,
There are two kinds of cryptography in this world: cryptography that will stop your kid sister from reading your files, and cryptography that will stop major governments from reading your files.
and I couldn't find any description on what cryptography is used in the scenario above - only brief statements that "it is there" which isn't very convincing.
How good and reliable is the cryptography used for encrypting the service packages?