I think regardless of the laws that the government passes, people will still be able to use secure crypto. Look at the war on drugs -- anyone that wants drugs can easily get them, they just cost more than they would otherwise, and the taxpayers have to pay billions of dollars a year to provide free room and board for anyone that keeps too many drugs in one place.

If you are committing treason, or something, the price of going to prison for using PGP is much less than the death sentence you'd get if you sent the messages in the clear.

I also don't see laws against crypto (and steganography) really being effective. A law is one thing, convicting people for violating them is another.

Think about what a tough time the government has in bringing cases against criminals. It's 50/50 as to whether or not they can convince a jury to convict when they have a security videotape of the accused gunning someone down. "And here we see the defendant discharging his handgun into Ms. Smith."

Do you really think they're going to be able to get convictions for people alleged to be hiding encrypted data in normal streams? "It's clear from the noise pattern in this image that there is a hidden bitstream in the low-order bits. This means that anyone exchanging this image is probably forwarding on encrypted terrorist communications. We can't actually prove this beyond a reasonable doubt... it is possible that they used a buggy version of Photoshop when they were resizing it for their lolcat blog. But probably terrorism!!"

I am not losing much sleep over this.