It's not obvious to me why Zoom should have any less right than, say, a hotel to block people using its service for criminal activity.
A hotel that suspects you're taping child porn in one of its rooms is well within its rights to call the police. If Zoom has reason to believe you're distributing child porn in a Zoom room, why shouldn't it be allowed to take action, too?
But you're arguing for the ability for hotels to install peephole cameras in every room to make sure you're not up to no good.
The point of encryption is that no one knows what you're doing, because they can't see it. Just like no one can see what you're doing in a hotel, most of the time.
No one can see what you're doing inside your hotel room, but they know when you enter and exit, who you're with, and they can hear you if you make noise. They can track what you watch on TV, and when you're on the Internet. Housekeeping goes in every day and sees all your stuff, and rearranges some of it.
So they can't literally see you every moment, but they have a lot of visibility into what you're up to.
A hotel that suspects you're taping child porn in one of its rooms is well within its rights to call the police. If Zoom has reason to believe you're distributing child porn in a Zoom room, why shouldn't it be allowed to take action, too?