This counterargument is bad. You need to stop parroting this quote.
The framing of this counterargument accepts the basic premise that the only people who have something to hide are "bad people", and that if you're not a bad person then you won't have anything to hide.
You need to engage with this presumption that the only people who have something to encrypt are pedophiles.
The best free speech analogy is not this "hurr I have nothing to say" retarded horse shit, but a defense of hate speech on the basis that the sword that defends good free speech (political dissent, etc...) must necessarily defend objectionable speech. This context means that, yeah, pedophiles use encryption, and we object to that, but we can't defend our need to encrypt things we all agree need to be encrypted without also defending pedophiles.
And that's a shitty trade-off and we all feel bad about it, but it's not ambiguous or up for debate; there's no way we can evaluate this ethical dilemma and end up putting the prosecution of pedophiles and terrorists ahead of our own encryption needs.