Many won't say no, because the advantage of having a government willing to look out for their bottom line is far too large to ignore for the sake of a few users.

I agree. If companies aren't compelled by law to collaborate with the government, this will incentivise the government to find other ways to persuade them.

Many (most) don't encrypt anything anyway and will just comply with warrants and requests. That's not really the point.

The point here is that where we have device and service providers like Apple and Google and whoever-just-bought-LastPass where we do trust them to encrypt our info, the government won't be making rules that compel them to undo that work.

If you didn't trust Google and Apple to begin with, the government compulsion would be meaningless anyway.