Yeah, refusal to disclose passwords is covered under the Regulation of Investigatory Powers Act (or it was when I was in college, at least); I suspect *that* law will be tweaked (i.e. to cover the same imprisonment terms as the original offence for which you are being investigated, so for murder that might well mean life for not disclosing your password) but there needs to be a *very* tight scope placed on that (i.e. if the police are searching for terrorist propaganda and find a small amount of cannabis at your house, the drug would be confiscated and destroyed but no police/judicial action taken as a result beyond the confiscation (not that I care what people do to themselves if they are consenting adults)). Will that kind of thing happen? Of course not. Laws are (effectively) created by the tabloid press and the various muppets on Mumsnet et al, so we'll get monosyllabic drivel with enough loopholes to drive a fleet of buses through. I'd love to vote these people out but a) I keep voting and all I get as a result is different idiots wearing different coloured ties, and b) you can't vote for the Daily Heil or Mumsnet to keep quiet for a week and just let us get on with our lives.
...get a search warrant. Or, to be a bit more accurate: stop whining about how difficult your job is now and just do what you should have been doing all along. If you are having trouble identifying "persons of interest", that is not my problem. If encryption is too hard for you to break covertly, that is not my problem. If you can't do your job without every single person holding the door open for you to have a look around inside, that is not my problem. See a theme here, Hannigan? You are paid a handsome salary to detect nefarious arseholes who would do damage to the UK and its interests; perhaps you should earn that salary instead of moaning about the IT industry making the life of your staff difficult. If a dragnet is the answer, you are asking the wrong questions.
The one I use - not sure if it's one I overheard and integrated or came up with it myself - is 'plasticop'. I suppose 'prosthetic police' is a more appropriate term, given that they're in place of police that *should* be there.