All the government is asking for here is a continuation of the status quo. it's always had the ability to wiretap phones, but people don't use phones as much anymore - they use IM, Facebook, etc. to hatch their devious plots. Wiretapping - analog or digital - requires a judge's approval in this country. Sure, it can be abused. But do we in the IT world really want to be providing an untraceable means of communication…
The obvious answer is no, but it is the wrong question.
The question is: Are we willing to provide them untraceable, secure communications to them when that is the price to provide it to people yearning for free speech in totalitarian countries? And are we willing to provide it to them when not doing so means all of our communications have exploits that can and will be used by non-governmental agencies as well?