I've figured out the cause for this bug. It happens when pam_keyinit is
used. This happened with ssh based logins in this openssh upload:

  https://launchpad.net/ubuntu/+source/openssh/1:6.5p1-1

The use of pam_keyinit and the way that it creates a session keyring
when logging in over ssh is keeping the eCryptfs kernel code from being
able to find the mount key. ecryptfs-setup-private is ran as the root
user. It executes ecryptfs-add-passphrase. which adds the user's mount
key to root's user keyring. However, the root's user keyring is masked
by the session keyring that was created earlier so the kernel cannot
find the mount key when ecryptfs-setup-private executes the mount
program.

WORKAROUND:

$ sudo keyctl link @u @s
$ sudo adduser --encrypt-home foo
$ sudo keyctl unlink @u @s

I'm not sure about the appropriate fix at this time.

** Changed in: ecryptfs
   Importance: Undecided => High

** Changed in: ecryptfs
       Status: New => Triaged

** Changed in: ecryptfs-utils (Ubuntu)
       Status: Confirmed => Triaged

** Changed in: ecryptfs-utils (Ubuntu)
   Importance: Undecided => High

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https://bugs.launchpad.net/bugs/1328689

Title:
  ecryptfs-utils does not work with Ubuntu 14.04.1

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