BitTorrent has encryption and most clients use it by default. The problem here is that you can't really have something that's as wide open as the BitTorrent network but at the same time impervious to "bad guys" like copyright holders and ISPs.

In other words, how would you authenticate peers? How would you prevent ISPs from mitming your encrypted p2p connections if you have no authentication for them, and you in principle can't have any?