The second major side effect will be essentially making writing software into a completely corporate thing. Either the official algorithm is a secret (Remember the Clipper Chip and/or Skipjack?), or writing implementations becomes work that only a very trusted few are allowed to do (see inevitability of snooping above). Currently it's very difficult for medium to small companies to do the paperwork for security clearances. It's not going to be any easier to get programmers certified or bonded or whatever to work on official algorithm implementations. This means slower introduction of any innovations, and any buggy implementations will be in use for a long time before getting fixed.