That is not feasible for apps where data is more valuable than ephemeral chat.

imagine if Google Drive started encrypting by default, the amount of people that will lose their data (when they never asked for encryption in the first place) will kill the app. 

 Google is huge, they likely have automated scans of all drive content and additional human moderation 

 But that's the point, this regulation kills any competition, unless the competition enforces e2ee like you said, and then most users will stay away because they will keep losing their encryption keys.