Encryption of the communication would prevent MITM snooping but it is not at all easy. The problem is the initial key exchange. The two nodes have to exchange a key first to use for the encryption/decryption. This key exchange itself can't be encrypted and the ISP (aka the man in the middle) can swap the key with its own.

Node A sends its pubkey A to ISP
ISP swaps it for its own pubkey S (they have this private key s)
ISP sends pubkey S to node B disguised as node A's pubkey
Node B does the same and ISP sends Node A its own public key S'
Node A sends encrypted message using S' to ISP
ISP decrypts the message using key s' then encrypts it using public key B and sends it out to node B

The reason why https works for websites is that your computer is relying on a centralized "master key" (CA) to validate that the key that the website's server sent you is not changed by the ISP or MITM. We can't add that to a decentralized network such as bitcoin.