Just last week during a weekly test of a DOJ system the FBI dispatcher called the DEA. I saw an encrypted signal follow but the FBI person apparently could not hear them, calling again and moving on as if no response. I have no way of knowing if that was indeed the DEA calling back but if so this is exactly the trouble with encryption living on what is supposed to be for interop.
That's pretty much what is driving this. It's easy to come up with these plans when the systems are installed, but maintaining them is the issue.
Encryption keys can be shared, but often departments don't always get along. The desire to work with another agency can wax and wane as staff changes.
The other issue I've seen is even simpler. Agencies will change encryption keys for various reasons and just plain forget that they need to let the other agencies know. I've seen it happen with simple things like PL tone changes.
Getting something simple like a PL tone change propagated through our own agency, getting all the radios located and programmed, is hard enough. Getting another agency to do it at the same time is even more difficult.
Then there are always the radios that get "forgotten". Spare radios, that one in the bottom of the drawer, the one that went off to the shop, all failure points.
As I said above, encryption has it's place, but that place isn't everywhere and it certainly isn't in interoperability.