This is the standard concern with any SaaS solution, from Salesforce.com to hosted Gmail to Mint.com to QuickBooks' online offering. We get the objection at RescueTime less often than you might think. When it comes down to it, data about what you did as an individual (whether it's Twitter-like or a passive recording of window/tab titles) isn't THAT valuable/scary.
It's probably likelier that you'd have a disgruntled tech/admin do something untoward with the data on a local version of the app.
It's probably likelier that you'd have a disgruntled tech/admin do something untoward with the data on a local version of the app.