Correct, encryption is essential. We need to get better at it too as shown by recent leaks. The unfortunate truth is though the bad guys have got way too good at signals intelligence. If they aren't screwing you by asking companies very nicely for your data, they are taking it through secret court orders, and if that fails, hell there is always the cable taps, oh, and the majority of our encryption is broken. Using a VPN/Tor/whatever? Yeap, we are interested in breaking that too.
It's going to be a slow maybe impossible struggle to move towards linking our communities in a real mesh networks. Maybe the Internet of Things will help, I'm skeptical at best though. I can't imagine any happy ending if we continue with the same infrastructure we are using now.