To centrally disable the encryption of the Contact List, look in the 'security' tab of the IT Policy... set the value 'Content Protection of Contact List' to 'Disallowed'
Once Content Protection is enabled, any time a device is wiped, it follows the wipe by 'Scrubbing' the contents of it's Flash memory... this is what takes the extra time.
Devices prior to the Bold write over the flash memory by a pattern similar to:
11111111
10101010
11111111
01010101
11111111
11001100
00110011
11111111
This is what takes an hour or more to complete, and ensures data cannot be forensically retrieved from the flash memory.
Devices from the Bold onwards only write over the flash a couple of times, which is why they only take a few minutes to 'scrub'
IT Policies allow you to restrict functionality, but not positively effect values, so yes you can enforce the use of content protection within an it policy, but not then laterly switch it off. you can simply stop enforcing the restriction, but the user will then need to switch off content protection on the device themself. Similar example... you can prevent people from enabling the 'Allow outgoing calls whilst locked' within an IT Policy, but cannot forcefully enable the feature on behalf of the user... they have to switch it on themself if they want it.

regards, Craig