From what I heard, the encryption was having a very noticeable impact on performance.
"Data protection is available for devices that offer hardware encryption, including iPhone 3GS and later, all iPad models, and iPod touch (3rd generation and later)."
I feel like this is mostly Qualcomm's fault, but also Google's for announcing a product (FDE) that wasn't actually fully ready to come to market (typical half-assism from Google, I would say).
This pisses me off because many people now might not want to use encryption anymore even when it does get hardware accelerated and the issue is solved, because of all the articles that "encryption slows down your Android devices" Google has caused to appear now.