Sometimes mediocre encryption is better than strong encryption, and sometimes no encryption is better still.
The Wall Street Journal reported this week that Iraqi, and possibly also Afghan, militants are using commercial software to eavesdrop on U.S. Predators, other unmanned aerial vehicles, or UAVs, and even piloted planes. The systems weren't "hacked" -- the insurgents can’t control them -- but because the downlink is unencrypted, they can watch the same video stream as the coalition troops on the ground.
The naive reaction is to ridicule the military. Encryption is so easy that HDTVs do it -- just a software routine and you're done -- and the Pentagon has known about this flaw since Bosnia in the 1990s. But encrypting the data is the easiest part; key management is the hard part. Each UAV needs to share a key with the ground station. These keys have to be produced, guarded, transported, used and then destroyed. And the equipment, both the Predators and the ground terminals, needs to be classified and controlled, and all the users need security clearance.
Contrast this with the additional risks if you encrypt: A soldier in the field doesn't have access to the real-time video because of a key management failure; a UAV can't be quickly deployed to a new area because the keys aren't in place; we can't share the video information with our allies because we can't give them the keys; most soldiers can't use this technology because they don't have the right clearances. Given this risk analysis, not encrypting the video is almost certainly the right decision.
There is another option, though. During the Cold War, the NSA's primary adversary was Soviet intelligence, and it developed its crypto solutions accordingly. Even though that level of security makes no sense in Bosnia, and certainly not in Iraq and Afghanistan, it is what the NSA had to offer. If you encrypt, they said, you have to do it "right."
The problem is, the world has changed. Today's insurgent adversaries don't have KGB-level intelligence gathering or cryptanalytic capabilities. At the same time, computer and network data gathering has become much cheaper and easier, so they have technical capabilities the Soviets could only dream of. Defending against these sorts of adversaries doesn't require military-grade encryption only where it counts; it requires commercial-grade encryption everywhere possible.
This sort of solution would require the NSA to develop a whole new level of lightweight commercial-grade security systems for military applications — not just office-data "Sensitive but Unclassified" or "For Official Use Only" classifications. It would require the NSA to allow keys to be handed to uncleared UAV operators, and perhaps read over insecure phone lines and stored in people's back pockets. It would require the sort of ad hoc key management systems you find in internet protocols, or in DRM systems. It wouldn't be anywhere near perfect, but it would be more commensurate with the actual threats.