While it is true that Telegram's clients are open-sourced, their server-side code is not. So we don't know how information is stored on the server (I do not think that it is encrypted).
Closed source servers are no problem in verifying E2E encryption if the client is open source. Whatsapp's issue is that the clients are closed source. Telegram's issue is that it's optional to encrypt your messages. That's the long and short of this whole Whatsapp versus Telegram discussion.
