Because without good encryption, commerce will be WIDE OPEN to fraud as criminals acquire information required to steal money from people, like bank account numbers, passwords, locations of money, etc.
If we can't use encryption to protect our information from criminals itching to use it for fraud, then fraud will explode and we'll need LOTS of cops to track down all the criminals.
We should tell them to take a hike, because:
1) Cops will never catch fraud before it happens
2) Cops will never recover all the money stolen
3) Trust in banking will falter
4) Trust in using the internet for commerce will falter
Also, "key escrow" won't work.
I'm sorry, but if the US Government couldn't keep the HYDROGEN BOMB secret, how am I to trust ANY government to keep secrets WORTH TRILLIONS? (I.e., their escrowed keys secret from the criminal element?)