The source code isn't encrypted.
But, I gather your question has to do with security? If the source code is available, how can it be secure?
Well, we know that "security by obscurity" doesn't work. Keeping something binary-only doesn't prevent exploits. On the other hand, publishing the source code allows many people to look at at and find vulnerabilities before they get exploited.
As well, just because you know how a lock works, doesn't mean it's possible to pick it. Specific to encryption, knowing how something is encrypted is a lot different than actually knowing the encryption key. Even by knowing the method by which something is encrypted, it can still take a staggering amount of time and computer power to break a key.