> I'm not aware of any law it would have been violating if was encrypted in the US.
The laws as they were had exactly that effect: a lot of companies didn’t intend to have products sold solely in the US. And it was problematic enough that most companies avoided making a US-only version: even carrying such a product on a floppy disk while travelling outside of US could get you in trouble, see this article from 1995:
Sorry, we're talking in loops. The legal issue wasn't encryption vs other cryptography, it was export or not. 7800 did face that issue, and resolved it by making the non-US version not do the crypto. This was probably easier in their case due to PAL vs NTSC. :)
I think both of us might be making the error of correcting something the other person wasn't intending to comment on! :)
Some export complications around crypto exist to this very day-- at least for commercial hardware products. I've had to fill out the export forms myself, and not that many years ago.
However, export was another matter and the export version of the 7800 left the crypto out!
In any case, my point was that weak crypto spanning into the late 90s was not a result of technical limitations.