A sufficiently motivated government has a nearly infinite amount of tools available for breaking encryption. Ignoring the possibility that it might know proprietary weaknesses to various systems (a hypothesis that is unknowable), there's just so much you need to secure at each node in a computer system.
Are you personally sure no backdoors exist in the physical hardware you use? In the operating system you use? In the compiler used to build your OS? In any of the applications on your system? Are you sure that there's not a hardware keylogger on your keyboard, and do you check every day before sitting down that there's not one? Are there any secret cameras pointed at your keyboard, or sensitive microphones hidden nearby that can distinguish what keys you hit?
And once you're sure of all that, are you just as sure everyone you communicate with is equally diligent?
And, while we're at it, have you come up with a solid patch to prevent the well-known rubber hose vulnerability that exists in all cryptographic systems?
That doesn't mean the crypto-anarchist project must fail. Encryption is invaluable: while the vast majority of other technological advances--sedentary agriculture, writing, maths, roads, sewage systems, paper, the telegraph, electricity, the light bulb, cars, "computers," satellites, Google--have all increased the legibility of the world to the State, encryption does the opposite. The panopticon isn't an existing, established system but instead an equilibrium point that the State has to constantly push us toward: anytime the economic cost of that push is increased, it gives us more opportunities for creating spaces of genuine human autonomy.
But once you recast crypto-anarchism in that more moderate and stronger form, encryption moves from "our one hope against total domination" and a "hope that with courage, insight and solidarity we could use to resist" to something more banal: one tool of many. Not even a particularly effective tool: governments don't care about a bunch of nerds throwing PGP parties, and all the encryption in the world hasn't prevented the State from throwing Assange into jail (a pleasant jail with some fine Ecuadorian decor, but a jail nonetheless) and obliterating his organization.