Encryption is just one (important) piece of the privacy puzzle. Another important piece is steganography.[1]
Effective steganography could hide the fact that you're using encryption at all, and could make traffic analysis[2] more difficult. Widespread use of effective steganography could make wholesale digital spying a lot more difficult.
The use of anonymous remailers[3] also needs to become much more popular; in particular, the mixminion[4] remailer, which was designed to address many weaknesses in earlier remailers.
Traditionally much more difficult, but as or even more important than the technological solutions mentioned above, is educating the general public about the need for and value of privacy enhancing technologies. Fortunately, the massive publicity around the recent spying scandals is doing a lot of the hard work for us in this area.
Finally, there's a great need for educating the general public on how to use these privacy enhancing technologies properly, and making them easier to use. There's still a lot to be done on this front, but the challenges are not insurmountable, and they are getting easier as the general public becomes more computer literate and more privacy- and security-conscious.
I read something a while back (unfortunately, I can't find it) in the NYTimes postulating that the 9/11 hijackers used steganographic techniques to communicate via the open 'net. If that's true, I wondered, then what could possibly be the point of storing/analyzing internet communications twelve years later? If they were using steganography in 2001, I can't imagine the techniques they're using to hide in plain view today.
It makes you wonder what the actual point to all of this surveillance is. Regardless, I whole-heartedly agree with you that steganography should be prioritized much higher than crypto.
You are naive if you think that national security is the reason for all this surveillance. It's a pretext, a convenient excuse for the masses. The real reason is establishing a global surveillance network, monitoring digital communications both in the US and abroad and establishing/continuing international supremacy.
Since you can't explain it in those exact terms to the masses without causing an outrage, you have to tell them it's for their own safety and to protect them from brown skinned tunic-wearing AK47-waving freedom-hating lunatics.
Effective steganography could hide the fact that you're using encryption at all, and could make traffic analysis[2] more difficult. Widespread use of effective steganography could make wholesale digital spying a lot more difficult.
The use of anonymous remailers[3] also needs to become much more popular; in particular, the mixminion[4] remailer, which was designed to address many weaknesses in earlier remailers.
Traditionally much more difficult, but as or even more important than the technological solutions mentioned above, is educating the general public about the need for and value of privacy enhancing technologies. Fortunately, the massive publicity around the recent spying scandals is doing a lot of the hard work for us in this area.
Finally, there's a great need for educating the general public on how to use these privacy enhancing technologies properly, and making them easier to use. There's still a lot to be done on this front, but the challenges are not insurmountable, and they are getting easier as the general public becomes more computer literate and more privacy- and security-conscious.
[1] - https://en.wikipedia.org/wiki/Steganography
[2] - https://en.wikipedia.org/wiki/Traffic_analysis
[3] - https://en.wikipedia.org/wiki/Anonymous_remailer
[4] - https://en.wikipedia.org/wiki/Mixminion