If you don't know who you're talking to, then there is no point in encrypting the data, because you're probably talking to the attacker. ("Man In The Middle")
Now, the idea of "I'm talking to the same person I talked to last time" is useful, but if the users are all conditioned to accept random certificates without understanding, then when they go back a second time (and the attacker is waiting), they'll agree to the new cert, just like they did the first time.
If you create an account on happykittens.com, you don't really care if the cert happykittens.com is sending you is signed by a trusted CA. What you care about is that the second time you visit the site, when you log in with your brand new account, that the cert the site sends you is the same you received when you created the account (the site is the same you created the account on). This has nothing to do with the fact that the cert is signed from a trusted CA or not, and thus, making it difficult for the user to accept a SS cert is not the right solution IMHO.
Key continuity is a fine answer to this problem. Just come up with a way to provide it on every device every user might reasonably want to log in from, for every site on the Internet.
Actually, no. For all practical intents and purposes encryption w/o authentication is as good as no encryption.
Unauthenticated encryption is 'better' than a plaintext in just one thing - it protects against passive snooping. Anyone willing to splice the connection will have full access to all your plaintext data and you won't even know about it. As such it's nothing more than an equivalent of reversible traffic obfuscation.
So if your "better" meant "obfuscated", then, yeah, it's better. But it's no more secure (in a conventional security sense) than a plaintext.
Now, the idea of "I'm talking to the same person I talked to last time" is useful, but if the users are all conditioned to accept random certificates without understanding, then when they go back a second time (and the attacker is waiting), they'll agree to the new cert, just like they did the first time.