Backing up and encryption with GPG

I have an external USB HD. I have several user accounts to backup.

I've heard that using compression is a bad idea because a .tar can be partly recovered in many cases if the HD is going bad, but a .tar.gz is lost if the HD starts going bad. Isn't the same true for encryption? Do I really want to encrypt a backup anyway for that same reason?

If I do encrypt I could ask each user to create a gpg key set and use their public key to encrypt -- this way only they can unencrypt their backup. This seems destined to create problems for administration -- definitely more secure on an external HD though.

Instead, I could create a GPG key for the root account that runs the backup via a cron task. Anyone logged in as root could then decrypt buttuming they have the pbuttphrase -- seems pretty damn secure but problematic if the sys-admin ever gets bonked on the head.

I could lock the USB in a safe covered with honey to attract bees to ward off anyone with a stick of dynamite trying to get the USB HD?

Just wondering about what is the recommended practice here to balance security of data and ease of making and restoring backups....

Thoughts??