For the record as an EMT I have been on calls that pretty much cover the entire spectrum from good to bad. Never once have I felt the need to have some type of privacy on the radio system. Then again I know the limitations and capabilites of the systems I use, use proper radio etiquette, and don't give information that's not needed to be given.
By no means am I saying you don't have a need for some privacy. It's just that when I see and hear comments about fire and EMS radio systems needing to use encyption or some other form of privacy I start cringing. I agree there are some perfectly valid reasons to have access to a secured voice path or two, but the negatives far outweigh any illusion of benefits in most cases.
Now I will say that there have been a couple calls where I did need to hide my communications. But that was from the patient or the family/bystanders. Encryption wouldn't/won't help in those cases. Whether or not the entire world could hear my radio conversation was completely irrelevent.
I've been an EMT since 1973 and served a full career as a dispatcher in a large multi-agency, multi-jurisditional 9-1-1 center. I've served with both volunteer and paid ambulance services. IMHO, your comments are spot on and I would add a couple of things.
On the volunteer side, I have found that having most radio traffic in the clear helps your community know your agency. When it comes to fund drives and other requests for support (not always money) the better people know you and your squad, the more likely they are to step up when asked. Full encryption would be a negative from this point of view. Not necessarily a deal breaker, but it's a piece of the public relations pie.
When there is coverage, cell phones can be a viable alternative to encryption. I live in the Adirondack park where cell coverage is spotty at best. I can use my phone in the southern third of our response area, but the rest has no coverage at all. So cell phones are not a 100% substitute.
And, like you, I have found that hiding voice traffic from bystanders and/or family at a scene is not going to be solved by encryption.