If you are unscrambling the inner wrapped data to be able to clean it, data that is encrypted, wouldn't you need the encryption key? So you've added an encryption wrapper around the encrypted data, but then you still require both keys (the original and layer you added), which rather makes the whole thing pointless, doesn't it?

This whole process seems rather unnecessary unless you have hackers hanging probes off the main CPU bus or force dumping sections of memory, which shouldn't be possible outside of the owner process. Once data is in the machine being processed, the necessity for security is lessened (assuming it's enforced that non owner processes can't touch the data in memory). It's the ability to steal a file off a storage medium that enabled the Sony Hack, wasn't it? So, encrypt the data on the hard drive.
Yes, it's cool and the process problems (most of them) got solved, but really how much manipulation can be done in the encrypted state? concatenate (add data), deletion (remove data), multiplication (not sure of the use here). If you need to change the data, or say, feed it to your e-mailer program you still have to decrypt it, right?