It's possible for both things to be true at the same time.
If Signal exists and is secure, will criminals use it? Sure they will, criminals are people and people want private communications.
But if you ban honest citizens from using Signal, will criminals stop using secure communications? No, they have an unusually strong incentive to use them and will seek out alternatives. The percentage of criminals who switch to insecure communications will be lower than the percentage of honest people who do.
Which increases the amount of crime, because the amount you're helping law enforcement catch criminals is smaller than the amount you're helping criminals exploit victims. This is also compounded by the fact that there are more honest people than criminals.
There is a theory of bureaucracy ("an institution will attempt to preserve the problem to which it is a solution") that says law enforcement agencies will ask for this even when they know full well that it will increase the overall amount of crime, because more crime is good for them since it means more law enforcement.