Oh, I thought you mean "as you push it" encryption.
When I was in the military, Encrypting data was not acceptable for disposal though. They make you physically destroy it, which is why I imagine they do things in this manner.
Yes, physically destroying drives prevents problems ("oh that wasn't encrypted?", "turns out it still had parts of unencrypted data on it from the previous server it was installed in", "what do you mean 'encrypted according to 1995 standards' (DES) is no longer secure?"). It's a good policy; but if you offer both "destroy" and "erase", "my" crypto implementation of "erase" has a lot to recommend it. (And there's no reason you can't follow it with a good zero-everything.)
When I was in the military, Encrypting data was not acceptable for disposal though. They make you physically destroy it, which is why I imagine they do things in this manner.