Like Moxie says, money buys technology, and they will eventually find someone to rig up a workable solution for what they're trying to do.
Governments are in a unique position here. They can always just move up the stack. Can't break the crypto? That's fine. They can just require the mobile phone companies to sell phones with spyware already included.
That problem is, I think, a showstopper for "anti-circumvention" tools like whatever- the- next- generation- of - Tor will be. Dictatorships have little to lose by backdooring or rootkitting devices; they'll laugh off any outrage stirred up by the discovery of these methods.
But the economics flip around in Europe, Japan, the US, &c: governments there do have something to lose by surreptitiously backdooring huge numbers of devices, and the odds are good that any efforts to do so will be detected (the state of the art for reverse engineering now includes decapsulation and imaging of electronics packages).
That problem is, I think, a showstopper for "anti-circumvention" tools like whatever- the- next- generation- of - Tor will be. Dictatorships have little to lose by backdooring or rootkitting devices; they'll laugh off any outrage stirred up by the discovery of these methods.
The US government is a special case again. Since most of the companies mentioned here are headquartered in the US, the US government can resort to the no-tech solution of just asking for the data and presenting a subpoena (or so was my experience working for a large US telecom carrier).
It could be argued that the scandal in Germany proves even european governments don't have a lot to lose by backdooring devices beyond what the law permits them. Admittedly, the number of backdoored devices was probably low, but the government did seem to act unlawfully.
Governments are in a unique position here. They can always just move up the stack. Can't break the crypto? That's fine. They can just require the mobile phone companies to sell phones with spyware already included.