When doing the slowness in the password hashing step, on the other hand, you can make things more equal between you and the attacker. In other words, if the encryption itself was slow, you would not be able to make it as sow as you would wish, and the attacker would not be much thwarted. On the other hand, the attacker only has to decrypt the first block or so to quickly rule out wrong passwords. If the encryption was inherently slow, then it would be very slow for you, because encryption time is proportional to the size of the data to encrypt or decrypt. Salts and configurable slowness, the two mantras of good password processing, are to be applied on step 1, not step 2.
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