Without encryption, internet doesn't work. Without internet, banking and e-commerce doesn't work. Really, not a single user-identifying service can function without encryption.
Also, encryption is based on math and logic. You can't really prohibit people from using it, or having it in any sensible way. Meaning that if we live in a fantasy land where this became outlawed, you'd still have any two nodes using encryption should they wish to. I doubt terrorist have the necessary incentive to follow international laws.
In fact, a mathematically unbreakable encryption is simply generating random data (aka. a one-time pad https://en.wikipedia.org/wiki/One-time_pad), and having a copy of this data at each end of the communication. Want to transfer sensitive data across the border? Just xor your data with the random data, and take the random data with you across the border. If the microSD card didn't leave your butt-crack at any point, you can merrily download the xor-ed data through NSA's mainframe, and they can't do jack about it, even with quantum computing, or any imaginable alien technology.
Sure, someone tech savvy can get around that, but not everyone. Just look at how many criminal cases end up finding emails explicitly talking about plans and crimes. So there are people nowadays not even using encryption when committing crimes. If you make encryption-by-default impossible, the amount of unencrypted messages will increase, and you'll have gained those.
Now whether that's good or bad is a separate discussion; I tend to think it's bad, but that's a more nuanced argument than "you can't ban it, so don't do anything about it".
Or someone who has a strong incentive to keep their communication hidden - like a terrorist or a drug enforcer. This leads to a situation where law abiding citizens are punished when their right to privacy is denied, while criminals aren't hindered. "When you outlaw X, X will only be used by outlaws"
Criminals aren't perfect.
See also http://www.bloombergview.com/articles/2015-10-20/shh-credit-..., http://www.bloombergview.com/articles/2015-08-18/bny-mellon-... and http://www.bloombergview.com/articles/2015-10-20/accidental-...
Clearly neither being really smart nor having a lot at stake will prevent someone from sending sensitive things over email.
As for terrorists, a short search turns up https://books.google.com/books?id=VqY4Wr3T5K4C&pg=PA410&lpg=....
I think if you claim that major criminals' encryption usage would be unaffected by making it difficult to use, you need to support that at least as well as I've just argued for the opposite.
"If you make encryption-by-default impossible, the amount of unencrypted messages will increase, and you'll have gained those." Requires you to monitor every message for every form of data, and assuming the false assumption that banning encryption increases the simplicity of finding messages, you would probably only find more things not related to what you are looking for. Only assuming you have control over all data channels, which even the US doesn't have.
On the other hand: This message is then flagged: bomb, truck, explode. While you could better be looking at other stuff like origins and communication contacts. These give a clearer view than the random words you will be picking up, even when they are encrypted.
Don't we assume the NSA is logging any US traffic anyway? Even if not, they could require a direct line into all messages sent via some apps.
Does this mean we should outlaw the use of screwdrivers ?