Your (1) partly fails because they'd just toss you in jail until you hand over the key. If they think you're a terrorist that jail might be overseas with no access to lawyers. If they think you're a paedophile they'll just leak that info (and this your life is destroyed).

Also, "Truecrypt properly used is a gigantic pain" and although I have nothing to support it I reckon many people use it incorrectly. Has anyone done any research?

See "deanonymizing alt.anonymous.messages" for examples of people doing crypto wrong.