Huh?

(as Satoshi's wallets were created before encryption was even used in Bitcoin wallets I hardly see how that would be relevant)

This issue has been discussed for several years. I think that the very-rough consensus is that old coins should be destroyed before they are stolen to prevent disastrous monetary inflation. People joined Bitcoin with the understanding that coins would be permanently lost at some low rate, leading to long-term monetary deflation. Allowing lost coins to be recovered violates this assumption, and is a systemic security issue.