The escrow loss problem is a probabilistic game though, and one I'd be willing to bet that someone enterprising could offer insurance for; whether it's loans using it as capital, or actual insurance.
Think about it this way, it's like malpractice insurance for doctors. So there should be malpractice insurance for states/courts - if a conviction is later overturned and the state is liable for the return of property, it gets paid out by insurance.