Performance impact of device encryption
You are absolutely correct in stating that the bottleneck is actually not the encryption/decryption but NAND write rate. In fact, the performance observed for read/write of encrypted v/s non-encrypted does not vary significantly owing to high cpu speeds. What you might look at though is the rate at which block level encryption happens for the first time. Once the device is block encrypted, the performance numbers are pretty close.

You can use AndroBench to profile your device pre and post encryption.