In the case of crypto, either the services gave up and recognised that the
genie was already too far out of the bottle (hence perhaps the pressure for
increased powers of surveillance in other ways in order to compensate), or
they allowed widespread encryption because they recognised the benefits it
could bring to commerce might outweigh the problems, or they allowed it
because they already have mechanisms that might break it - an explanation
can be chosen based on viewpoint and tinfoil hat-size.