the problem is: the encrypt server have to decrypt the file bevore it gets to the client (or the client would need a plugin) because the default flash player would not be able to read a swf encrypted by a third party software. Now all you have to do is to use your decompiler on the flash file in your browser cache to decompile it as you would have bevore. Ergo: the encryption would be useless.
I don’t know if this is correct (im no flash guru). But i don’t think the flash player can’t read files encrypted in a way it doesn’t understand.
So i don’t realy think this would be possible this way.
But on the other side. I’m a gfx-guy – not a coder 
EDIT : ok i just saw that i was totaly wrong (i did some googeling.. should have done that before
)
Posted about 1 month ago