If you are in an industry that has to meet state and/or federal compliance rules you pretty much have no choice but to ban BYOD. It is absolutely impossible to make a device which the company does not have absolute control over compliant, and most employees who want BYOD want them because the government has forced IT's hand to the point of making everybodies lives difficult.
As for law enforcement, as soon as you enter an airport or other travel terminal (bus, train, ship, ferry) the rules are such that any item in your possession can be fully investigated and/or seized without a warrant. We can thank the continually renewed Patriot Act for that one. Sanitized or no-go is my policy, if I need access to data while traveling I have memorized all my VPN and RDP data so that access is easily attained.
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