Crypto is currently usable in practice. Its a bit hard for many users, but its doable, especially with modern VPN implementations. If any encrypted tunnel is allowed, you can put all your traffic through it, and no one knows whether you are surfing banned websites, or working on the corporate VPN. And you can be pretty confident your modern crypto implementation isn't going to be broken.
But steganography isn't really usable, in practice. If nothing else, the government can do traffic analysis, and see suspiciously large traffic volumes going to a small collection of servers (which are accepting the steg'd communication, and proxying your requests, presumably).
And even if the traffic looks like normal HTTP, with images in it, that's simply not good enough to use, in a regime where the secret police can arrest you if they suspect you are trying to hide your traffic content. And they will be able to find users, because eventually the servers accepting steg'd traffic, which the population are using, will become known.
So, while I think it'd be very hard to remove the ability to send small amounts of text data, from the Internet, I think it'd be possible to make private communication unworkable, in practice, for most people.
I don't see how this would be worked around, without building a massive distributed network of computers that all accepted and routed steg'd communication; something like if every webserver would accept, and onion-route, incoming steg'd traffic.
That doesn't exist, so I think their initiative will work, if they push it enough; hopefully rules like this remain isolated to relatively repressive regimes, and not gain widespread adoption; the widespread commercial use of encrypted communications is probably the best defence against global crypto bans.