Encryption is a bit different debate with different tradeoffs. With encryption, the government can try to use different encryption than everyone else, and many sectors of industry don't rely on encryption. But vulnerabilities on common software apply to everyone; there's pretty much the same pieces of software and electronics (e.g. mobile phones) used by every country, by civilians and businesses and governments alike.
I'm sorry, but what industry doesn't rely on encryption? Every financial service relies pretty heavily on encryption.
As an aside, I personally would argue that in the age of big data/information that your populous having security is extremely important. Modern warfare (or all warfare) depends highly on information. TOR only works if average people use it. The military suggests soldiers use Signal because many times they've gotten in trouble because adversaries intercepted SMS messages to loved ones (or just someone getting some strange).
There is of course a question of balance, but personally I don't see one. Safer to encrypt everything imo.
For sure, my point was that the debate, instead of being between government figures who are in favor of keeping the right to listen in vs. non-government figures who want to keep them out, it will shift (has shifted?) to a within-government debate. In the days after 9/11, I don't get the impression there was much of an intra-government debate at all.
By intra-government you mean like US vs China? (or any other competitors? We could say Israel and Germany) I think this has always existed though the information age has swung the balance to there being more importance for average citizens to have encrypted data in a more general sense and not just finance.
"Intra" here means inside the same government (you're thinking of "inter"). The hypothesis is that there will be parts of the US government (like perhaps the FBI) that will advocate for government-controlled backdoors into all encryption, while other parts (like perhaps the NSA) will argue for the strongest, backdoor-free encryption possible.
I think it's an interesting hypothesis, but one weakness is that the government can have its cake and eat it too: they can mandate that all encryption have backdoors, except that the government is exempt from that requirement.
Of course, then it just becomes the usual "if you outlaw strong encryption, then only outlaws will have strong encryption". As long as backdoor-free encryption merely exists, the "bad guys" will get their hands on it and use it. So you haven't fixed the problem of being unable to prosecute crimes due to encryption, and at the same time you've weakened everyone's security. This state of affairs is still beneficial to the government, as it makes dragnet surveillance a lot easier, and your average citizen with "nothing to hide" won't seek out the (illegal) strong encryption.
...until the higher ups learn that, yet again, China or Russia or Iran or somebody got their hands on a lot of sensitive data, and they start pressuring the NSA to get a handle on this. I don't know if it's happening yet, but if it hasn't it will.