What surprises me about this argument, is that their stance is that terrorists are accidentally starting to use encryption. So, by consequence, that in the past terrorists simply did not bother with encryption?
In that case, I wonder whether the terrorists have been triggered by the simplicity of current day cryptography, or simply by the knowledge that the governments are always listening in on everything everyone is saying.
It seems to me that someone started an arms-race, be it government or terrorists, and both are willing to cause massive amounts of collateral damage in order to keep one-upping the other.