It's not just public safety radio going encrypted, but EVERYONE. I work on computer networks and now even the data on wired cabling between computers and servers in our work environment is configured for encryption. Encryption is used by cell phones, satellite TV, cable TV, DVDs (although easily defeated), web browsing (SSL), and many other modern technologies. After 9/11 and the resulting increased paranoid attitudes as well as documented hacking and interception of data from counties like China, everyone wants to protect their data. Even just 10 years ago, implementing encryption was a major cost, but today encyrption is nothing more than just another IC chip and small circuit on a motherboard turned on by simply enabling an option on the configuration menu.
The radios today are specialized computers with D/A converters linked to transceivers. Since the voice is already digitized, it requires little effort to encrypt/decrypt the data stream in real-time, especially with the faster microprocessor in these radios. When public safety organizations spend millions of dollars for new radio systems, they would probably like to use every available feature, including encryption. Many police departments know very well that the criminals as well as honest citizens monitor their radio communications. Encryption probably makes them feel safer knowing unauthorized personnel can't track their activities and some of this is probably being pushed by Homeland Security. Just as you wouldn't want some unknown person monitoring your wireless telephone or Internet buying using your credit card, many radio users don't want others to monitor their communications either.
I've been listening to scanners for nearly 40 years, but I've just about given it up even though I have several digital scanners. With the majority of nearby agencies using a Simulcast system (which is so garbled on my scanner that I stopped listening to them) and the increased use of in-car computers and cell phones by the officers, my scanner has gone nearly silent - especially now that our police dispatch all calls via their in-car computers. I miss the days when everything was discussed over the air and it was easy to monitor, but those days started dying when cell phones became affordable to use in the late 90's. There will come a day within the next 10 - 15 years when all radio communications are encrypted - whether by choice or by law.
For those that believe that they have a right to monitor public safety radio traffic in the clear, do you also feel you should be able to monitor all phone calls (both wired and wireless) as well as their in-car computer communications? At some point the hand held radios used by the cops will be replaced with smartphones so they can work just as effectively out of their vehicles. Their radios will likely become integrated into the smartphone (push to talk) and used only as a last resort.