Since child porn predates both wifi and the web, wifi encryption is just a band-aid when it's advocated as a solution to distribution of illegal content. People determined to use the broadband connections of others to mask their usage need only google things like 'break wpa encryption' and find adequate means, and they have plenty of incentive to be determined. Which still leaves the unfortunate middle-man with the same scenario of having his computer confiscated, but only now with even less of an idea of how to avoid the same problem in the future.
Besides that, my bias is instilled from seeing coffeeshops and similar small businesses inevitably annoy paying customers because of snafus with wifi ecryption, e.g. an older mac laptop that doesn't understand WPA2. My opinion is that this does greater damage than the boogie-men of unsecured wifi will ever do.
To again invoke the analogy of car theft, where I live it's considered more sensible to leave your vehicle unlocked and nothing valuable in plain sight than to tint the windows.