What makes me disagree with this point is the same sentiment behind the phrase "the universe believes in encryption." As far as anyone on earth knows, prime factorization takes exponential time on a deterministic machine. Without one or two major advances in human knowledge, there can't be any "arms race".
More to the point, encryption isn't a "weapon" in this situation, it's the goal. If people are able to use encryption that can be trusted, the people have means to the basic right of privacy when they wish for it.
The arms race doesn't need to happen in the pure math realm of crypto. It can happen in a myriad of other areas. One example - if I have a keylogger installed on your computer, it doesn't matter how perfect your encryption algorithm is.
More to the point, encryption isn't a "weapon" in this situation, it's the goal. If people are able to use encryption that can be trusted, the people have means to the basic right of privacy when they wish for it.