But the 'front door' approach usually just hides the worksheets until valid password is entered and then all relevent data is revealed. This is file when the workbook is in binary format as it's very difficult for the user to peak at the data without breaking the security.

The trouble is with .xlsx files you can see the context without using excel due to the xml storage.

So if a workbook has protection set the information must be encrypted within the xml storage to avoid prying eyes.