julesg/False Choice
There is no reason that I know of that full drive encryption technology could not be applied to non-mechanical storage media. There is also no question that software encryption does not provide as much protection for data stored on portable media as hardware based full drive encryption. As non-mechanical drives with sufficient capacity to hold a robust operating system and related application data become feasible, they can be augmented to include hardware based encryption.
Perhaps your IT guy is making a rational decision for now. Maybe your company's employees just don't carry around that much sensitive information. However, its just as likely that your IT guy is enamored by flash technology and doesn't understand the vulnerabilty of software based encryption.
Any company whose employees carry highly sensitive data (e.g. financial data, identity data, trade secrets) on portable devices is being highly irrational not to use a Seagate type solution as soon as it is available. Perhaps the NSA could recover data from such a device, but even the most ingeniuous criminals or corporate espionage types are not going to get anything. The value of being able to just write off a stolen device and move on is hard to calculate.