They're really hitting the "nobody should be above the law" talking point hard. How fortunate for us — it sounds good but doesn't survive even casual scrutiny. Crypto might interfere with investigations, but that is very different from being above the law. There are huge numbers of cases where some perp used encryption and was still bought to justice.
The best analogy I can think of is the document shredder. As a society we accept that individuals can protect their personal privacy and safety even if this occasionally frustrates law enforcement investigations. Shedder manufacturers aren't forced to limit how good a job they do to potentially aid LE as this would do more harm than good. And, after all, if you banned shredders, criminals would still be able to just burn their incriminating papers.
Banning the shredders is not a solution, you're right. The correct thing to do would be to legally require every shredder producer to include a little scanner right above the blades. This scanner would then take a copy and wirelessly send it back to a server, where it gets stored for 3 months. If there is no internet connection, the shredder must refuse to work. Living the dream!
The best analogy I can think of is the document shredder. As a society we accept that individuals can protect their personal privacy and safety even if this occasionally frustrates law enforcement investigations. Shedder manufacturers aren't forced to limit how good a job they do to potentially aid LE as this would do more harm than good. And, after all, if you banned shredders, criminals would still be able to just burn their incriminating papers.