I don't see how allowing the user to select encryption could be "asking for trouble," nor how it would have anything to do with interoperability. It creates a situation for those wanting to hear on scanners, yes, but I can make several strong arguments for it. Working in law enforcement, we have lost 50 officers so far this year in the line of duty, in less than 3 months! In January alone, 53 officers were shot. Encryption is something that we use for the safety of officers - not just to be super secret, contrary to popular belief...
As far as interoperability, all of our local units have the same encryption keys so we can all talk to each other encrypted. As far as State/National interoperability it is real simple....we turn it off.
I know a lot of people in the scanner world enjoy listening to scanners, as do I, but there is not a valid argument for not encrypting other than "I want to hear what's going on." I don't want to start a war on here, but I want to point out that there are legitimate safety reasons for the use of encryption and the officers having the ability to do it at the radio level is not a bad thing... The other option could be encrypt all the time.