One limiting factor was that this wasn't scalable - so a lot of people would be comfortable with it because there is little potential for widespread abuse - there just aren't enough resources to search & monitor everyone's mail and houses at all times.
There are no such limitations online, so better protections such as encryption are required to counterbalance it.
It's recently started to emerge that US opened and censored all international mail 1950-1989. We're talking millions of letters a week. It started as a measure to remove all reference to US use of biological weapons in the Korean War and grew from there. (the third season of the Blowback Podcast did a couple of interviews which covered it really well.)
Further, usually, a judge has to approve. There's at least some oversight and reasonable cause involved.
I understand of course that scale is an issue online, but that doesn't affect the idea that encryption gives us basically unbreakable communication over a distance, and removing it is not eroding our last vestiges of privacy.
No one is saying anything like that.