The onus of providing evidence is,and always should be, on the accuser - so if the police is suspecting you of being a terrorist/pedophile, they should produce evidence that you are. In ideal world, you should be able to refuse to hand over your encryption key and go home without any charges, not a stupid 5 year sentence for not giving out a key to data which might/might not be encrypted.

It's not a valid defense, because usually, if the police is investigating you, they probably already have some evidence on you. Finding out some random data on your drive usually comes later.

I haven't read the statute, but I got the impression from the link that the law reads like the laws in the US compelling you to give a breath or blood test when suspected of DUI. If you refuse, you receive punishment whether or not you were actually guilty.

Only two years for the latter.