This does not work for many data models, for both technical and economic (e.g. increasing costs by multiple orders of magnitude) reasons. Many real systems would require hundreds of millions of active encryption keys, encrypting data that is smaller than the encryption block size.

Every database architecture that exists today is designed with the deep assumption that scalable fine-grained deletion will never be required, largely because we don't have good computer science for how to do it. As experienced database operations people know, if you are required to do this kind of delete then the sane way is to completely rebuild your storage with the data to be deleted filtered out, if you have ample excess capacity -- it is often much faster than editing the existing storage. For some large-scale systems, there is no plausible solution.

This is an interesting computer science challenge -- a database kernel designed for efficient deletion -- that I've thought a lot about over the last year dealing with GDPR compliance. It definitely isn't a thing that exists today and encryption doesn't help.