Steem is a little more complicated because of the rewarding function. If you expect to be rewarded by Steem stakeholders for your contributions I don't think it is reasonable to have it only be visible to your friends, or even, in most cases, to remove it later (after rewards have been paid).

It could always be tried but I know as a stakeholder I would be downvoting and not upvoting any encrypted content put on the chain that I can't even see which is also asking for rewards.

Not every usage of Steem has to involve rewards though, and there are some big ones on here already that don't. Perhaps such an app could be developed that offers social type features, restricted visibility using encryption, and uses Steem but either without the reward pool aspect, or with a narrower pool (using SMTs, etc.)