This is a natural consequence of their refusal to abide by due process...
How is it a natural consequence? Is there some law that proves an increase in encryption must happen after a perceived injustice?
Rather, what actually happened is that the spy agencies watched everybody, and by and large didn't care about people who weren't throwing up red flags. If it weren't for Snowden and the Internet-fueled rage he spurred, you'd never know that you'd been investigated at all.
For most of its history, the Fourth Amendment has never been about protecting privacy, but rather protecting against using the state's power to disrupt innocent people's lives. An unobtrusive observation doesn't cause any significant disruption, so the process that is due is minimal. Even accounting for the Katz privacy considerations, the information is being gathered by a service provider, and provided en masse to the investigators. From that perspective, where the surveillance is seen as a reasonable and legal tactic, this new desire to have encryption everywhere is just an obstacle with no real benefit. Sure, there are a few legitimate places to use encrypted channels, like a corporate VPN, but for simple personal messages, it's only getting in the way of legitimate investigations.
Not only will the sophistication of encryption spread by it will go from being an option to being a default status quo.
That's the investigators' fear, yes. Again, they see the surveillance as being reasonable, and the encryption as a needless obstacle. That's why they're asking that "tech firms ... consider the impact sophisticated encryption software has on law enforcement".
In the not too distant future, if they want access to data, they will need to get the cooperation of the owner of that data... or get nothing at all.
...so they effectively get nothing at all, ever. To use the mandatory Slashdot car analogy, if a police officer asked you first, how often would you grant permission for him to pull you over, regardless of your speed?
By conducting indiscriminate monitoring of the speed of vehicles, he's probing your vehicle's status, and that's invading your privacy. Surely you have a right to keep your vehicular operational tendencies private, right?
Ultimately, there is a middle ground that must be found. Having encryption everywhere will indeed cripple law enforcement to a certain extent, and having no encryption will curtail essential liberty to a certain extent. Given mankind's tendency to overreact to immediate threats, I expect we'll waver between the two extremes, with the public at large demanding that police somehow magically identify criminals while blind, deaf, and impotent. That's a double-edged sword, too, and it'll bite us, as well.