How can a single person operation keep a collection of online wallets secure? While this question is similar to others about securing wallets, I think it merits a question of it's own.

One thing that has dissuaded me in the past from running an online wallet service of some kind is the worry that I could be compromised (rubber hose, extortion, intimidation etc) and by extension permit full access to a large collection of bitcoins that I don't own. If I'm running an operation with potentially millions of dollars worth of bitcoins and my contact details become known (not that hard to find really) then I'm naturally a risk to my clients.

I've heard of multi-key encryption so that no one person has complete access (client PIN etc), but I'm not sure if that would solve the problem.

So my question becomes how can a single person operation ensure that they are unable to compromise the wallets under their care? Ideally the answer would not require any technical knowledge on behalf of the client beyond a passphrase. 

(If such an approach became commonplace then it could act as a deterrent because attackers would simply see that the website uses that approach and slink away.)
This is a great goal, which many people will assume just can't be done.  But remarkable strides are being made in the field of secure cloud computing via homomorphic encryption.

These schemes allow servers in the cloud to perform computing tasks (currently only a limited set of arithmetic) on encrypted values without decrypting them.  See more at In what ways does Full or Partial Homomorphic Encryption benefit the cloud? - IT Security - Stack Exchange

A question about applying this to Bitcoin clients on Less Wrong is here: Homomorphic encryption and Bitcoin but they seem to be confusing homomorphic encryption with a form of secret splitting between two computers, which would not meet the goal outlined here.

I'm guessing that current homomorphic techniques are inadequate or too slow or both for bitcoin, but I'm not sure.  But further research may make it practical.