That’s rubbish. Two people could go somewhere they wouldn’t be heard and have a private conversation. Encryption provides no more challenge to investigation than that option that has existed forever…
This is still the case. That's not a good example of privacy being eroded.
Now most conversations have moved online, and a secret record can be cheaply created of exactly who is talking to who, when, how often, and in the absence of encryption, even what they are saying. Phones we all carry, even without spyware apps, can be located through signal triangulation, before we even get to facial recognition and omnipresent cameras, smartphone or otherwise.
That, theoretically, we can recover some of the privacy we used to have (so long as we don't get targeted surveillance, which has become so effective defeating it is nearly hopeless), does not mean that, in practice, privacy has been massively eroded for the average person.