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This leads to a few possibilities:

This is why I find the story very likely to be fabricated or at least grossly misreported.

2) They did encrypt but used weak passwords.

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is reporting that it was just steg, no encryption.

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3) NSA and its foreign allies have a way to crack strong crypto regardless of password entropy.

Hmm you did not go the extra step to option six...

It all depends on what you mean by "good stego", it is usually possible to detect possible/probable stego because it's signiture does not match the signiture of the carrier sufficiently well, and it produces anomalies or artifacts which you can detect. However detecting the artifacts will not of necessity get you sufficient information to say positivly it's present or sufficient information to reveal what has been hidden.

Ask yourself what has the terrorist organisation lost?

Which format were the files in? its trivially simple to remux a .MKV file to include a text file [or many other filetypes] which won't show up as subtitles.

Oh and why were the documents so quickly recovered?

Good Stego means that you don't try to stuff too much hidden data into the carrier file. In this case they used movie files which contains a lot of pictures where you can store data in the lowest color bit. I don't have the numbers in my head but you can store Kbytes of data in a ordinary jpeg picture, and most people will not notice unless you know what you are looking for.

Then the terrorists are idiots. Stego is not effective unless your opponent is your little sister.

was the suspect being monitored by US TLA's?

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My bet is that the "steganography" simply involved making the filename look like a video.

I find it kind of humorous that:

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Ok here the NSA/CIA/DHS/.... multi-billion operation and the German discover it.

There was probably no steganography anywhere in this story.

The subject has to get out of the country. Rules there are severe for porn, adultry etc. maybe care less about bomb makign plans and stuff.
Encryption won't save you: you are not allowed to use it or present the key.
Solution: have a microsd card and hide it (the level of inspection needed to find that ...).
Get in to US:
- try a: hide from scanners (invasiveness of search applies, but(t) ...)
- try b: encrypt it just in case and as a decoy: the pron is homemade with a maried wife and she will be killed if my country found it => plausible reason, agent feels sorry for the guy
- try c: actual data is hidden - the tricky part ( a truecrypt multi-key solution is what this lot here would use, i assume)