I'm confused -- I too had an instant upload.
( Kinda like this person:
http://gsfn.us/t/ldj )
My upload, was a 40MB file. And it was private not public.
I can understand, if the file was already uploaded to my own account, how it could be seen that it was already uploaded and skip the upload.
But this file was not already in MY files.
You need either unencrypted copies of both files, or copies encrypted to the same key, in order to be able to compare 2 files and tell they are identical.
So if my data is encrypted so that no-one but me can see it -- how can you know that my file is the same as someone else's file?