Strictly speaking I suppose anything is possible, although the CPU power required for this would probably mean you'd need to batch-encrypt files after taking the photos to avoid your camera taking ages to save each photo. Even if you could get the encryption working fast, it would have limited application. Maybe for a fixed "trail" camera? But for use in-hand, the inability to review photos (e.g. for exposure/focus issues) would be a major issue.
From a cryptographic point of view, it would be much more secure to encrypt a bunch of photos into an encrypted archive than to encrypt individual files, even with public-key encryption. The known structure of JPEG and DNG files (and their EXIF, etc) is enough to give attackers an edge in knowing what patterns to look for when decoding. A CHDK RAW dump would not have this issue, but the JPEG associated with it would...
Designing such a feature would require careful thought, and consideration of what risks you were actually protecting against. Key length, encrypting batches, encryption speed, etc, there are various tradeoffs to balance against each other. Here be dragons...
