The magical thinking comes in several forms:
1. Thinking that govts. wouldn't justify the distrust by abusing their holding the keys.
2. Thinking that govts. would be able to secure this huge tempting target.
3. Thinking that this would make use of encryption much less convenient for everyday use (e.g. there are extra steps involved in going to the escrow store each time an encrypted communication is made).
4. Thinking that this doesn't introduce single point of failure for all everyday use, i.e. ecommerce but see:
5. Thinking that who holds the key issues can be resolved for international communication.
6. Thinking that people who are already breaking or planning to break the law are magically going to obey this one.