I’m barging in quite late in this discussion, but being in the eye of the storm in the 90’s – in the first wave of crypto wars brought by the kind president Clinton, I have some knowledge of the issues involved from both sides of the debate.
1- The issues are very complicated and it is very difficult to phrase them in white or black terms. No obvious good or bad guys. It does not help that the technology constantly shifts and makes past arrangements impossible.
2-The US government primarily keeps loosing because it behaves like an elephant in a china shop. Even in this specific case *When the Feds asked for info that hadn’t been backed up, Apple balked. The FBI then made its tailored request, which Apple asked to be placed under seal, according to the New York Times. Instead, the FBI went public, setting off the high-profile drama that has turned Apple CEO Tim Cook into a privacy darling. *
3-It seems clear to me that the USG attempts to derail the attempts of the industry to lock themselves out of the capability of penetrating user devices. Apple and Google are claiming this self-inflicted incapacity for about a year now. Apple publicly acquiescing the self-hacking capability (and willingness) - albeit on a much less protected Iphone 5C- will make them hardly credible.
4-Aside of the moral issues involved, there are at least 2 reasons why Apple et al. don’t want to be able to provide data of their customers even reasonable subpoenad data. One is the huge potential liability, especially if hackers are able to enter their internal network and the leak is made public. The other one is that these are global companies. They will be blackmailed to death to provide the same set of capabilities to other governments. One has only to remember the fights RIM (Blackberry) had to engage with foreign governments in order to understand this.
5-I find it hard to believe that the billions that the NSA and CIA is pouring in crypto and cyber warfare would not be capable of recovering data on this phone. What the heck, they can easily read chips and find the keys or perform many other hardware-type analyses. It is of course possible that the FBI does not have that capabilities and/or NSA cannot work on this purely internal US case. However, my guess is that neither the Farook data is important enough nor significant effort was done by competent people on behalf of the government. Without being overly paranoid, I think this is a well calibrated case for ramming some back door technologies on device manufacturers.
6-Much of this, of course results from the unbelievably moronic policy that was effected in the Snowden debacle. Instead of somehow providing him immunity, 72 virgins and a 8 digit amount of money if he returned to the US(or Litvinenko methods alternatively), nowadays, the Russians have all the documents and release them slowly to the largest effect. For the large companies, it is now very clear that any secret cooperation with the USG that might be damnable in the eyes of the public is extremely dangerous.
7-As against any past period I can think of, the capability of monitoring people and their communications, actively tracking their every activity is many times greater. There is not any more reason to break encryption per se, there are so many possibilities. Just think, say, of a Chinese bright guy just finishing graduate studies in the US who is recruited by the Chinese intelligence and starts working at Apple, or Google, or… Let me assure you that no amount of auditing will be able to find the carefully concealed “bugs” planted by him somewhere in the millions of lines of code. And if it’s found - eh, a buffer overflow oversight. Does anyone think that this is only speculation ? And please remember that in a complex systems there is code everywhere - from the camera to the Synaptics touch controller.
In conclusion - my personal view is that privacy is so broken now that there should be a concerted action by everyone to shore it up. And what is amazing to me is that those persons in the US fighting against gun controls are on the other side of this debate which is much more conducive to Big Brother and government control and interference than firearms.