To be fair, it was the government that passed a law to legalise such activity; it was the industry that challenged that law and the High Court that overturned it!
It's also the government that made such activity illegal in the first place through copyright law and excessively strict interpretation thereof. Without that, it wouldn't need a law to "legalise" it.
So other countries can frame laws that don't criminalise a large percentage of the economically active electorate. Why couldn't Call-Me-Dave? Have you got any insight/reasons?
Call-Me-Dave had to backtrack after making out he wanted to ban encryption and a bunch of smart computer scientists and cryptographers made him look foolish. I guess there in lies why Call-Me-Dave couldn't.