The scenario you described accomplishes both goals.
By banning 'the masses' from using encrypted communications, it'll sort the haystack and everyone who continues to do so can be profiled, plus they're already involved in illegal behavior.
How so? Couldn't we come up with a way of disguising encrpyted message streams so that they did not stand out? It would be more expensive, and given enough analysis they could probably detect them anyway, but it strikes me as an arms race.
