If they are programmed for receive only, then there's nothing illegal about that. No, they are not great scanners, but they are a low buck option for those that just want to listen to a few local frequencies.
If they are programmed to allow transmitting, then that is another issue.
A lot of people will never be anything but a consumer. They don't know how radios work. They wouldn't know how to program one. They are perfectly comfortable paying someone to do the hard work for them in exchange for a box that lets them listen.
Well, yeah. Digital on it's own will not fix that.
But let's talk about encryption...
People transmitting where they do not belong is -exactly- one of the reasons that agencies like encryption and like trunked systems that have good access control and security.
We've had that issue locally where individuals with two way radios have programmed them to transmit on local public safety systems. They see no issue with popping up on the local fire channels during active wildland fires to ask questions or give advice. The FCC has busted people for that and it's well documented.
People that do stupid stuff like this with radios, be it a CCR, MARS/CAP modded ham gear, or an eBay Motorola are part of the problem. Unfortunately they are too stupid to understand the consequences of their actions.