One key part is that the crypto wars were around export, lest we forget "PGP Source Code and Internals".
If there was no international business, any-strength crypto would have been and could have been used.
If there was no international business, any-strength crypto would have been and could have been used.
Efforts to design foundational cryptographic protocols were completely hamstrung by the spectre of ITAR and the real possibility that designs would have to US only. Right around the time that the US gave up, the commercial community was taking off and they weren't at all interested in further standardization except was creating moats for their business - which is why we're still stuck in the 90s as far at the network layer goes.
Tinfoil hat: it was dropped to prevent exporting code being 1A protected as case law