PGP and the law

Today I read an article about the existence of PGP on a machine can show criminal intent.  (http://news.com.com/Minnesota+court+takes+dim+view+of+encryption/2100-1030_3-5718978.html)

Now granted this person was doing something VERY bad (kiddy porn).  But with that aside.  I found it very disturbing that the presence of software that could be used to keep investigators from getting your data as criminal intent. 

What does this mean?

I think that it is BS #1.  I have encryption software on my machines.  Does that mean I am doing something illegal or does it mean I am attempting to protect sensitive data on my laptop?  I do not agree with what said bad man was doing (the kiddy porn thing).  But I do not believe that the presence of software used for privacy purposes should be shown as intent to cover-up a criminal act.

Does this mean that EFS in Windows is the same thing? Because if that is the case then we are doing something bad. 

Please give me your thoughts.