Bruce Schneier's blogged a great essay about the history of DES, the Data Encryption Standard, which was, for a time, the only public, standard cipher lawful for use by the American public. Most interesting is this part, in which he details how the National Security Agency deliberately weakened DES to make it less secure.
When IBM submitted DES as a standard, no one outside the National Security Agency had any expertise to analyze it. The NSA made two changes to DES: It tweaked the algorithm, and it cut the key size by more than half.
The strength of an algorithm is based on two things: how good the mathematics is, and how long the key is. A sure way of breaking an algorithm is to try every possible key. Modern algorithms have a key so long that this is impossible; even if you built a computer out of all the silicon atoms on the planet and ran it for millions of years, you couldn't do it. So cryptographers look for shortcuts. If the mathematics are weak, maybe there's a way to find the key faster: "breaking" the algorithm.
The NSA's changes caused outcry among the few who paid attention, both regarding the "invisible hand" of the NSA–the tweaks were not made public, and no rationale was given for the final design–and the short key length.
