There's to many problems associated with the company doing that though. If they do it and it turns out the person just lost it they might try to sue, or other responsability associated things. This way the user is responsible for clearing their own phone and all that good stuff. Less liability problems. Pretty cool invention though.
Any how the information is still stored in the battery,
it can be retrieved.
That doesn't make any sense...
If you could compile your own kernel for the phone, you could use this one kernel mod for encrypting at the loopback (does ROM and HDD). Neat stuff.