"when it comes into security"... yes its a placebo effect.
simply put, blocking IP's doesn't hide your trace, but masking your trace does and encrypting your line does it.
edit: ok think of it like these -
1) government A obviously knows about peerblock, so they have their IPs banned, so they just simply switch IPs, although after a while that gets banned too.
2) the person doing peer transfers with you is being monitored, coincidentally it saw your naked IP, busted?
3) the ISP itself is listening onto your connection, its bare naked so its like reading newspaper, block that and you're blocking your internet.
tl-dr: encrypted line for security > blocking random IPs for security. both? you're just hurting your P2P.
its been discussed around these threads a while back, yes it is possible to decrypt your line, but it takes time and money(equipment), unless you're hacking trillions of dollars why'd they burn thousands of dollars just to decrypt it?