SSH NOT a problem
I'm not saying I'm in favour of the scheme but I don't see any problem in principle supporting the basic concept of encrypted home directories with ssh. Its only a convention that requires ssh authorized key-files to live in the home directory.
The encrypted directories could have some unencrypted envelope meta-data. You can put the ssh public key in that.
SSH also does not have to use public keys it can delegate to the normal PAM library. As users are going to have to put in a password to decrypt the diretory anyway you have already lost all the benefits of using public key authentication anyway might as well just prompt for a password.
Supporting encrypted directories where the key is only present when the user is logged is a good (and not new) idea. Taking a religious position that all information about the user must be encoded in one of these is just making things over complicated.