I can see how this happened. They removed their own custom encryption system in preparation for the native encryption offered by lollipop. For some strange reason they couldn't actually finish making that native encryption feature shippable (some last minute show-stopper bug maybe?). But the old encryption code was not ported to lollipop either, so essentially they ended up with having two unusable encryption systems on their hands and deadlines looming. The end result can be seen here.

Of course this is purely speculation, but I see this sort of thing far more likely explanation than some nebulous collusion with NSA (Hanlon's razor etc)