I predict in the future after a couple of high profile scape goat cases where a famous suspected terrorist, illegal movie downloader, or say whistle blower, cannot be prosecuted because they used encryption, the use of encryption will become illegal.
The problem with outlawing encryption is: everyone needs it for business purposes and to protect public / private infrastructure. If SSL encryption were to be forbidden, e-commerce would become very difficult...
Also interesting: http://en.wikipedia.org/wiki/Chaffing_and_winnowing ("Chaffing and winnowing is a cryptographic technique to achieve confidentiality without using encryption")
http://www.theregister.co.uk/2012/03/01/forced_decryption_ru...
However I think if some state is to ban encryption, it can be called a police state without any doubt.
That's actually simple - public should use strong encryption. That's it. I.e. those who care about such violation of civil freedoms have no other option anyway, if attempts to prevent this surveillance will continue to fail (and with the current power - they most probably will).