If I can't trust blobs in a landfill, I wouldn't trust blobs in a landfill that are decrypted by another blob in the same landfill. Just feels like smoke and mirrors that is purely about chasing CTOs and "CYA"-type decisions.
Some such vendors have a blanket destruction policy for old hardware, but this obviously means higher prices, so it's usually only borne by medical and military institutions. And there have been notable cases where this was supposed to happen but the disks ended up on eBay, unwiped, regardless.
SSDs make this even more likely because they have pools of storage which are screened off from normal access but are typically readable through special code in the firmware; as failing sectors are swapped out, sensitive plaintext can remain behind, unable to be wiped by a conventional dd-style blast. (HDDs have this too, but in much smaller quantities.)
I am surprised that drive manufacturers haven't built in encryption at rest though since it would be pretty easy to generate a key on first boot and then make it easy to wipe by just making a new key and thus essentially scrambling all the data on the disk instantly without having to wipe them at all.
I 100% agree there are security policies specified by regulations that make very little sense and this might satisfy them.