It won't be all that different to when people copied CDs and handed (or posted) them to their mates whenever they called, who then copied, handed them on to theirs.
People will avoid the need to go around to a friends house to obtain a copy and to an extent the friends of friends of friends may all be able to get access to the content at the same time, but scale wise I think it will remain much closer to hand to hand copying than p2p currently is.
The reason I believe that is that if the scale grows too large, e.g much beyond the known/trusted friends and their friends only group, it will be easy for investigators to get onto the lists and decrypt/determine what the content is, then have it removed and potentially go after the account holder for that particular group (may be easy or hard depending). Either way, the scale would need to be smaller to remain more secure. Of course those friends who download it, may then encrypt/upload to a new group.
edit: removed a few paragraphs that may have risked taking the thread way off topic. I'll save them for a more appropriate thread
