I should have mentioned that there is also a CodePlex project by the same person
to apply permissions to columns.
I think you are correct for contributors that it is security by obfuscation, as
they can create public or personal views that include more columns.
Whether it is true for readers depends on whether it blocks direct access to the
view pages that you don't have permissions to, which I would assume it does (but
would need to be tested). However, even they could presumably still access
"restricted" information through another route such as web service calls?
I think though you could achieve pretty strong security by making users
restricted readers, by only surfacing the data you want them to see on web part
pages, with personalisation disabled?