But this doesn't mean that technology wins. Rather, it makes the loss even worse, because it means the laws will ultimately have to be defined in reverse - rather than outlawing encryption, they will have to outlaw inability to decrypt. That is, it will be the end user's responsibility to ensure that authorities can decode data you transmit. Transmission of undecryptable data will be a crime, in and of itself.
Apart from the obvious dystopian consequences, this will impact progress in technology tremendously - suddenly it won't be possible to just invent a new data format or protocol any more. Doing so will put you at extreme risk of being interpreted as sending unauthorised encrypted data. So data formats will have to be registered - to send data in a new format you will first have to register a codec with the government and probably yourself have to be licensed. This will have a severe chilling effect on innovation. Software development, already dominated by tech behemoths, will become completely out of reach of small development teams simply because the regulatory burden is so high.
It's a depressing picture but given the trends of late I don't really see it going any other way. Only some extreme swing back towards individual rights over rights of the state will change its direction. But terrorism seems to have set in as a permanent tool for governments to grind away at individual rights.