Actually, the fact that a couple of secure email services decided to shut down instead of installing a backdoor for the NSA tells you that the algos are fine. The problem is that big companies like Google or Microsoft are not going to close shop in order to make a stand to stuff like that. They'll just hand over the private key for their certificates to LE and move on (and probably charge them for the goods too).
There's nothing magical about encryption, heck almost all the algorithms are actually standard, public and available for everyone to peruse and cryptoanalyze. Everybody that works in crypto knows what algos have weaknesses, and what they are. Obviously, new algorithms are invented all the time, and scrutinized all the time. Even an algorithm like RSA, invented in the 70's is still secure, but everyone knows that a quantum computer can crack it using Shor, so you're better off transitioning to elliptic curve. It's actually what the NSA uses themselves (along with AES).
The biggest problem isn't with the algorithms themselves, it's normally with lousy implementation of such algorithms. The PS3 is a perfect example of that. They implemented all this secure system and skimped on the random number generator, which brought the whole thing down. Just amateur stuff.
One of our products meets NSA Suite B (
http://www.nsa.gov/ia/programs/suiteb_cryptography/) standards, so I'm fairly familiar with this stuff.