I agree that full-disk encryption (i.e. encryption inserted in the block device driver) is not the right solution for storage encryption, and also the encryption at the file level is not a solution.
The right place where storage encryption must be inserted is in the file system implementation, where it is possible to implement a completely secure form of authenticated encryption. This is especially easy to do in the so-called copy-on-write file systems or log-structured file systems.
However, file system implementations are much more complex than block device drivers, so modifying them to insert encryption in the right way requires a lot of work, which nobody has done for any of the popular file systems.
While there are some commercial solutions that claim to be secure I have not seen anyone that manages the secret keys correctly (no secret keys should be stored in the encrypted device itself, regardless if they are encrypted with a password, because encryption based on a password is much weaker than with a long random key).
The right place where storage encryption must be inserted is in the file system implementation, where it is possible to implement a completely secure form of authenticated encryption. This is especially easy to do in the so-called copy-on-write file systems or log-structured file systems.
However, file system implementations are much more complex than block device drivers, so modifying them to insert encryption in the right way requires a lot of work, which nobody has done for any of the popular file systems.
While there are some commercial solutions that claim to be secure I have not seen anyone that manages the secret keys correctly (no secret keys should be stored in the encrypted device itself, regardless if they are encrypted with a password, because encryption based on a password is much weaker than with a long random key).