The problem is that surrendering encryption would not restore the old pre-encryption status quo. It would give government and state-linked actors absolutely unprecedented ability to observe, surveil, and monitor our activities now (and in real time) and in the past. These are not old abilities. They are abilities that have never existed.

When the government gets a search warrant to go and rifle through your sock drawer, they do not gain access to:

- A complete history of every physical movement you've made in the past several years to an accuracy of 1-4 meters.

- Every private correspondence you've made in the past several years.

- The history of every home automation device in your home and how it was used.

- Personal health and body monitoring data for years (if you use personal health monitors, etc.).

... and so on. As this technology advances the amount of information things can passively collect is going to keep growing exponentially.

Modern Internet-connected device-embedded computing devices log, collect, and can reveal more information than has ever been available in all of human history. Without encryption we're living in glass houses -- a true panopticon.

Encryption is critical if we are to have any hope of implementing a "smart" automated future without surrendering absolutely all privacy forever.

In the further-future (maybe not as far as we think) I can imagine things with direct neural interface to the human brain. That's where we might be going. Surrendering encryption and strong security as we head into that kind of world is a recipe for insane dystopian scenarios.

The old world is gone. The old status quo is dead. There is no "balance" that can be legislated that will restore it. The new world is a qualitatively different place where completely different rules and balances apply. In the new world we face a binary choice between absolute panopticon and total surveillance or an unparalleled level of individual privacy. There is no middle ground -- because math says so. Information is either encrypted or it is not. In security systems are either secure or they are broken. It's binary.

I actually think most of the people in this debate -- on both sides -- fail to realize just how dramatic this shift is. This is literally the end of an age of human history, and the relationship between individuals and governments (and "society") is about to be radically redefined in ways that many people (liberal, conservative, even libertarian) are not going to like. I know there are aspects of it that I don't like, like the strangely intimate relationship that is emerging between software and "cloud" vendors and human beings, but I don't see these things changing and I think the best reaction is try to work through the implications and figure out how to deal with them than to dig in and resist time.

Edit:

But "it can't happen here!"

Donald Trump is a credible presidential candidate, and has said things like "maybe he should have been roughed up" about protestors. Any power we give to Obama will be passed along to the next administration, and the next, and the next, and the fact that someone like Trump can even be considered should be a reminder that we cannot bet on future leadership being any better than present leadership. If you're right-of-center, replace Donald Trump with Hillary Clinton or Bernie Sanders. They are also credible candidates, and they too would inherit the panopticon we're building. Every power you grant to the current government will be possessed by all future governments -- including many you don't like -- and once granted a power is very hard to revoke.

No society can bet on its future leadership being perfect. That's an impossible pipe dream. Any society that lasts for any length of time is going to weather periodic episodes of fanaticism or corruption.

The way you stop it from "happening here" is by limiting government so as to prevent moral hazard. That way you can weather an awful leadership without descending into tyranny or collapse. The reason we don't live in a corruption-ridden hellhole or a totalitarian dictatorship is because we have laws, procedures, and customs that limit government. Those limits allow criminals to get away with crimes, but that's one of the costs of preserving a nominally free and open society. The alternative is to load up on moral hazard and then wait for the first corrupt or fanatical government to trip over it.