The move was to standardize encryption with a system called Clipper Chip which would have mandated that encryption keys be escrowed (stored) in a government or private facility. Theoretically, if the government thought you were up to something they could get a warrant, go to the escrow facility, and get your key. Just like getting a warrant to search your house.
The problem with that is that now SOMEONE has your keys and so your messages aren't guarenteed to be secure. There is nothing to prevent the government from swipping your key whenever they feel like it. And if they don't there is always the possiblity that an employee at the facility leaked or stole your keys.
Needless to say, Clipper Chip went down in flames. Currently, there are no restrictions on domestic cryptography use. (There are restrictions on it's export, asininely enough.) There is always an effort by a few Congress members or the FBI or someone to get encryption restricted or keys escrowed or something, but it hasn't happened yet.