> There's no logical reason why the NSA's position on this issue would
> change between 1970 and 1990.
Applying Occam's razor without enough facts gets you wrong conclusions. There were many many differences between 1969 ARPAnet and 1994 Internet.
1) ARPAnet was a Cold War research unit where designing new things to help the military was paramount. The NSA at that time was quite aware that designing in security first versus later was important for future military networks. The institutes that were going to connect to ARPAnet were limited and controlled putting in encryption would be easier to secure. The Internet on the other hand was completely different with it already spanning into .su and other places.
2) The politics were completely different in 1970's and the 1990's. In the 1970's ARPAnet was going to be connecting and learning about dealing with network failures in that war with the soviet union any day now. This environment security was more important than Control. In the 1990's the war was over and the US had won.. so control was more important than security.
The simple fact is that encryption is very expensive hardware wise and when your research computers are at best on a partial T1 adding in DES or some other encryption would make it too much for anyone to want to use. Back in the late 1980's we had encryption in our Kerberos systems but most people turned it off because it sucked the living bejezus out of the CPU when you were trying to do a telnet.