The are two schools of thought on this question. The first is held by Zimmermann, inventor of PGP, and by businesses. He and others like him believe that anyone who wants to use cryptography should be able to. It should fit with an individual's right to privacy, and anyone should be able to send an e-mail with the knowledge that the contents will not be read by someone else. Businesses like strong encryption since it stop hackers from fiddling their files, and provided a trustworthy e-commerce possibility.
The other view is held by many governments. Governments like to be able to know what's going on. Before now, their better computing facilities have been able to break computer codes and read intercepted messages. The crucial point is that this has been done on e-mails from terrorists, and had sometimes ensured a conviction, when the intercepted message was used as evidence in court. If a government cannot decipher messages, then not only the law-abiding public benefit, but so also do all criminals, who can plan their actions with the simplicity of e-mail and the security of PGP.
The debate has been raging ever since Zimmermann released PGP nearly 10 years ago. At the time, he was worried that he would be prevented by the threat of new legislation in the USA which would outlaw PGP, so he released it. RSA were not happy since it infringed their copyright, but eventually a settlement was achieved. Now PGP is widespread, and the debate is whether to let it stay in the public sector. At the moment, those in favour of PGP are the majority, especially since without PGP e-commerce would fail, but given a few terrorist attacks, that could all change.
Effectively a half-way house, key escrow is an attempt to allow security while still giving the law-enforcement a chance to succeed in decoding certain messages. Key Escrow works by taking a copy of someone's private key, splitting it in two, and giving one half to each of two trustworthy organisations. Neither on their own can decipher a message, but if there is a need for the police to decode a message, then they can apply to the two organisations to provide them with the key.
Clipper and Capstone were two systems designed in the USA that automatically used key escrow, but they failed since most people did not trust the government organisations put in charge of the key escrow, and the privacy for all lobby won. However, key escrow is not forgotten, and it may make a comeback if governments can find a way of completely ensuring that the system cannot be abused.