Certainly, $ISP could block all BitTorrent traffic if they wanted to prevent this, but that would be a much different situation.
It's also worth noting that there are a number of alternate roots [1] out there right now (that use DNS, not BitTorrent) and AFAIK ISPs aren't trying to block them, either.
In short, "encryption" was a really bad thing to call this, because many people believe encrypted BT connections are safe and encrypted in the traditional "you can't tell what I'm doing" sense.
This line of thinking is very similar to what happened when the Gnutella network itself was formed. It was created as an alternate system to the FastTrack network. Nervous of the legal system, the decentralized network was built with a (still increasing) number of clients available.
In the same way that the Gnutella network further fractured the web, alternate DNS systems have the same capability, on a much larger scale.
In my mind, there is nothing wrong with creating alternate systems that work beyond the view of government agencies and the public in general. However, every time we do this, we create yet another fracture in the Internet that we know and love.
"The Net interprets censorship as damage and routes around it." -John Gilmore