I have done this dozens of times but just recently ran into this error. Here are the steps I have gone through to get here:
It only takes a few seconds for it to bomb out and I get the error:
Error SQL72014: .Net SqlClient Data Provider: Msg 33161, Level 15, State 1, Line 1 Database master keys without password are not supported in this version of SQL Server
Error SQL72045: Script execution error. The executed script: CREATE MASTER KEY;
I followed the same process for the same database 1.5 months ago any everything worked fine...Is anyone else experiencing this??? I have SSDT version 14.0.61021.0 installed - not sure if that matters or not. I'm also running SQL Server 2016 Developer Edition (v13.0.1722.0).
Okay the way I ended up resolving this issue was to do the following:
In that database run the following script:
ALTER MASTER KEY REGENERATE WITH ENCRYPTION BY PASSWORD = [password here];
I haven't seen documentation on this, but apparently when you create an Azure SQL database it creates a database master key (DMK) without a password, and in SQL Server 2016 this is not okay. Hopefully this helps somebody else out.
Note: I was able to do this since I only wanted the data from the original database to refresh my local development copy - I haven't fully researched the implications of this.