Docs works fine.
It is found that some documents fail to be opened in Docs with warning "Document cannot be opened. The document extension is valid, but the content cannot be read, because it is either corrupted or encrypted."
Docs 2.0 CR3
This issue may cause by the document is created by 3rd party software(non-Microsfot Office). And these software may have their own functional code that Docs doesn't support.
Try to open issue document in MS Office and save as a new document, then re-upload to Docs, or copy content out from issue document and paste into Docs. That will resolve this issue.