Encryption is an on-going business, it has to be on-going otherwise security standards will not increase and businesses will not be able to protect their customers. It hurts the economy if data is compromised, Target and Home Depot are a few examples -- carrying cash is a waste of human time resources as each additional trip to the ATM is not adding anything to the GDP.
The number of players in the market that are developing encryption is too large, collecting and securing back-door keys from each firm is going to cost a government. Keys will need to be collected from firms that are operating outside the economic region. Keys will need to be shared with other economic regions as well, because their governments also want to catch their bad guys.
One solution could be that the government should setup a super computer facility for decryption (that will cost lot of capital). This way, law enforcement agencies could queue the facility much like scientists would queue for super computer resources to run their models. It would be transparent because lots of people would be involved, for instance, a judge making the decision that a certain user's information should be decrypted and next, an IT team viewing and decrypted data.
If anyone has a solution, please do share it with us.