One possibility is that Microsoft removed the tool to replace it with another similar tool called Microsoft Private...
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Folder 1.0, which was released around the same time the Personal Storage Manager was withdrawn. Microsoft Private Folder is also a free tool and has similar functionalities -- allowing individual files and folders to be encrypted.
As for what you should do with it, there's always a risk with unsupported software. It could be buggy and cause problems, slow down your system or conflict with other software. If you want to play with it, I suggest placing it on a junk server or workstation that isn't connected to your network and that is only used for testing. It shouldn't be put in any production environment, or on your network, under any circumstances.
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