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a lot of weight rests on those two words: "main problems". The main problems for the government are that criminal investigations are being impeded. By banning certain forms of encryption, they can criminally charge a suspect for merely refusing to decrypt data. And you can bet that the penalties will be stackable, allowing the government to use its discretion and perhaps charging someone with separate counts for each file he refuses (or is unable ...) to decrypt. I'm NAL, but I've also heard of the "forgone conclusion" doctrine, which somehow allows the constitution to fly out the window and allows the gov to imprison someone indefinitely until they decrypt the files. So, sadly, this ban does solve the main problems at considerable expense to citizens' liberties.
Conjecturing further:
- citizens would be allowed to encrypt, but they'd be required to keep a set of the keys used or else they could risk prosecution.
- There could be a government cloud server where you "securely" upload whatever keys you use (or, realistically, probably outsourced to companies like equifax which would then charge you a fee to do so),
- existing cloud providers would be required to detect when clients were using encryption-looking libraries/subroutines and store a copy of the keys into some registry.
- this could ultimately lead to "whitelist-only" software libraries, so that you cannot run anything on the cloud without building it with their dev environment so they can be sure you're not secretly encrypting things.
- going even further, this could lead to deep packet inspection that simply detects encrypted transactions and queries them against the gov key registry to "make sure" they are properly decryptable. Any failures to decrypt could trigger an investigation.