Number three isn't that unlikely. Encryption is hard to use and subtle mistakes can ruin the encryption.

And some of the mistakes are not that subtle.

http://www.telegraph.co.uk/news/uknews/crime/10276460/David-...

David Miranda carried USB sticks with emcrypted material through a UK border. He also carried a piece of paper with the password. The UK has abused their anti-terror law so ot was entirely predictable that they would abuse the law to detain and question Miranda.