There's a line, and past that line, law enforcement has no power to enforce laws at all. Removing the DOJ's ability to collect evidence is, in some cases, the equivalent to denying a detective access to a crime scene. If all productions of electronic evidence can be encrypted, and the defense is not forced to decrypt those files, then dirty corporations only need to encrypt everything to defend themselves in court.
Defense: "We produced everything you asked for."
Prosecution: "We can't even verify that statement. Decrypt it"
Defense: "We don't have to."
Case closed.