Feds put heat on Web firms for master encryption keys (CNET)

Indeed. The choice isn't whether to permit "domestic" spying, but only whether to authorise and pay for spies at all. If you have spooks (and all the countries you listed do) then they will spy on your citizens because that's what they do. Indeed if they did NOT spy on your citizens you're wasting your money, the bad guys you were presumably hoping they'd find can conduct their business in plain sight of the spooks, protected by an arbitrary legal convention.

In reality, with so many powerful nations paying for spooks the choice is starker. You must pay for your own spooks, or accept a disadvantage for taking the moral high ground as others continue to spy on you. They'll be Merchants of Light stealing industrial secrets and manipulating your people, not James Bond types jumping off exploding boats but they will make you pay dearly for your smug openness. This (abolishing spooks) has been tried before without much success, but I welcome anyone who wants to attempt it again.

So, you will have spooks, and the spooks will do everything in their power to spy on everyone in the world. But this is /not/ the knock at the door of a totalitarian state. It wasn't ubiquitous surveillance that made the Stasi what they were, it was Zersetzung - psychological harassment. A ban on "domestic" spying by the NSA was perhaps well meaning but ultimately unenforceable, but ensuring our governments don't practice Zersetzung is entirely practical. If in a year's time Americans believe the spooks have magically stopped spying on them and they go back to sleep, we have achieved nothing. But if they instead accept that they've hired people to spy on them and now must behave accordingly, we might have some progress.