on my work network, we've got an integrated PKI that makes it easy for people to exchange their public keys. If I'm sending someone a password or other sensitive information, I'll encrypt it against their keys there. If I'm just talking to someone (ie: not doing anything sensitive), encryption is off, signing is on. If I'm sending from my personal email, the only person I encrypt to is my work email.
I think the big reason that email encryption in general hasn't taken off is that it's a huge pain to exchange keys. Some keyserver attempts have been made, but frankly there's not been enough adoption in any circle I've seen to really call it a success. The only time this stuff seems to really work well is when there's a corporate directory and a mandate from management that says "you will get a pki certificate, and you will publish it on the global address list".