Explaining the technical details of my sites back-end is of no use. Half of them won't understand what I'm talking about and the rest won't care or will start spreading FUD ("OMFG admins can read my PMs!").
Besides if they read the TOS they would already know that private messages aren't truely "private". It's just like their e-mail, IM convos, and just about anything else they use the internet for, nothing is truely private and there is someone a long the chain that can see and read anything you do.
As for the MU hack we don't use it but have something similar. How it works is no bodies business but my own. It's my cheap form of security...they aren't working on the source code for it so there is no point in passing it around.
Aside from all that why do you even care? If you don't like the staff team at a forum then leave it for a better one. That's the great thing about the internet...so many places to go.