I've seen it used effectively. It could easily be applied at most sites with no worries.
Another method is to place most Source code within separate JS and VBS files, placed in a separate folder. (or anywhere, really). while the browser downloads the
scripts along with all the rest of it, it can be more difficult to search through a cache
for a temporary file when you only know the extension.
I wasn't saying anything against your methods; I was merely saying that, as you said, there isn't a built-in way to do encryption up to and including page interpretation; the best we can do is make it difficult, which is usually enough. the question inevitably comes up as to wether it's worth it, and that depends wholly on the code being obfuscated.
Another wholly different route would be to try to place all code possible on the server-side; permissions can be set to completely disallow access to the code