Still, let's not forget that in the UK the police cannot even ask people for an ID on the street. So they're not about to walk up to random people and demand access to their USB keys. We are talking about a judge being able to grant a warrant which demands that people decrypt information, within the confines of a police investigation...
We do seem to live in a world where governments and media (including the fiction industries) do seem to like to create constant alerts and fear, so we feel things are getting worse all the time and meekly accept to sacrifice liberties - from big civil liberties to simple things like the right to take a bottle of water on an airplane! We also seem to be creating "thought crimes" which is something that really really bothers me. So I have a tendency to be suspicious and wonder why such a law is needed, and how it could easily be abused, and what the agenda is.
Encryption is a challenge, and as much as I defend my right to privacy, (eg. using Tor even for mundane stuff because one day I might need it) and worry about the growing concept that what people think and imagine needs to be policed... I have to be honest and admit I also find it disgraceful that people can escape conviction just by encrypting their stuff. I can understand the frustration of the police and justice system at this... and why we might find it acceptable to let them demand the keys in certain circumstances.
I think it is a fine line between fair rights and letting people hide unduly behind the right not to incriminate themselves. If they kept the documents then it could be argued that they have already incriminated themselves by keeping the documents.
Of course I am all for putting "watch the watchers" in place, limits as to what kind of crime warrant this (real crimes not thought/planning crimes) etc. which there never seems to be in the UK - and without such controls and public monitoring I can easily imagine it could be abused...
So I am not sure where I stand on issues such as this one, really, worried about my privacy (and who knows when their kind of thinking might be made a crime!) but also outraged that money launderers, fraudsters, people trafficers, slave runners etc. could get away thanks to good encryption practices...