libmcrypt is a powerful encryption library that is very popular with PHP-based applications. However, most Linux distributions do not include it. This causes problems for many users that need to download and compile it separately.
I am guessing that the reason it is not shipped is related to encryption or patent issues. However, the source code for library itself is hosted and available on sourceforge.net
I have been searching unsuccessfully for a document of authoritative post that explains the exact issues why this extension is not bundled with mainstream distributions. Can anyone provide a pointer to such material or provide an explanation?
I guess you missed it. It's available in Debian, OpenSUSE and Fedora repositories, so that accounts for most of the mainstream distributions if you include the hundreds of their derivatives like Ubuntu and Mandriva. There aren't very many "mainstream" distros that aren't a derivative of the ones above.
If a package isn't in a specific distribution's repositories, it's probably because someone didn't get around to it yet. You may want to roll up your sleeves volunteer to add it yourself, or ask for someone to do it for you.
My guess is that if it isn't a dependency in the base installation package, it wouldn't be included, but is available through repos for many of the popular distributions.
Why install it by default if nothing by default uses it?
The US bans its software companies and distributors from exporting strong encryption - even if the software is already available or even developed outside the US.
AFAIK there are no patent restrictions on mcrypt - but the man page does suggest you check with the relevant algorithm developers.