Simply put the digital data is stored on Apple's servers. That means if those servers are hacked, then the data can be exposed to the outside world.
The next question is; "Are they encrypted once they leave the phone and only decrypted on the other devices?"
I personally have no evidence to say. My assumption is, no it is not. I make that assumption based on a simple premise; "Worst case scenario". As long as I always assume that, I know what my limits of trust should be. Cynical but after 28 years of professional programming, it has kept me employed
If I delete my photo stream and say photos are stored on Apple's servers, how long would Apple keep that data and I am assuming it would not be deleted as fast as I dump the pics from my files.
.....I do understand the the photos will be shared with my other IOS devices but they are secure or at least they are in my possession and are not privy to outside eyes unless hacked or stolen.