So, I was just reading the USB-C discussions about how everyone is afraid Intel is trying to add DRM to headphones to "push anti-piracy efforts into headphones and close the analog gap". This made me start day dreaming about just how far copyright companies will go for DRM, eventually putting chips in our heads and such (monsters!).
But as I was reading your explanation, could not the same system be used with a cornea descrambler in the distant future? A computer image is encrypted and displayed on screen in the encrypted state, but looks like noise or has a hidden layer that can only be seen if the person has the right part of the key in a cornea display (like a contact lense or complete cornea replacement). The cornea system would decrypt the message partially so the chip in the brain reads the signal from the visual cortex and makes adjustments so the real image or information can be comprehended.
The computer, or the file, would have the first layer of encryption, whereas the second and third layers would be inside the individual (eyes, brain).
How would the state compel you to get access to the evidence? Ask a court to remove your eyes and probe your brain?
This debate is not about passwords or encryption keys but about the rights of citizens to secure their property from the government. In the not so distant past, the government could take pretty much anything they wanted from you. Some governments had high ethics and would not cause harm to you, but that's just semantics.
Now we are entering an era where technology is allowing us to own property that the government can not take. We can create digital property and encrypt it to the point where they cannot get access to it without our permission. Today it's photos, videos, documents, etc., but in the distant future this might extend to 3D models of actual possessions that could be recreated or perhaps even copies of our own selves, allowing a form of immortality.
Does the government have the right to this information if we do not give them permission and we do have the ability to completely block their access?
That is the question behind this entire debate. Part of the reason government exists is for communal protection, but if we start having the abilities to protect ourselves better than the government or we cannot rely on the government to compel a communal verdict on others, then why do we need that element of the government to still exist in our lives?