In place of the "Select Recipient's Public Key" button that opens a file selector, there should be a dropdown list with all the Public Keys in the "Keys" directory. This would be much easier for non-technical users.
This could be a Gridview with a label on top that has the current button text, and the dropdown list could be placed below it.
Edit (3/27): It could also have a button called "add new key" that opens a dialog box where the user can add new keys from a location such as the downloads file or their desktop to the "Keys" directory.
Edit (4/3): Maybe the gridview on the side could become 5 rows again and have the order: blank, recipient name, select recipient, add new public key, blank. Also, the dialog box for when the Keys folder is empty should instruct the user to generate a new key for themselves, as they likely don't have one if the folder is empty.