Precisely! The software running on the phone should be representing the owner of the phone, period. We begrudgingly accept cloud scanning because that ship has already sailed, despite it being a violation of the analog of fiduciary duty. But setting the precedent that software on a user's device should be running actions that betray the user is from the same authoritarian vein as remote attestation. The option ignored by the "isn't this a good tradeoff" question is one where the device encrypts files before uploading them to iCloud, iCloud may scan the encrypted bits anyway to do their legal duty, and that's the end of the story. This is what we'd expect to be happening if device owners' interests were being represented by the software on the device, and so we should demand no less despite the software being proprietary.
1. What you’re asking for (“The option … where the device encrypts files before uploading them to iCloud, iCloud may scan the encrypted bits anyway to do their legal duty, and that's the end of the story.”) is impossible.
2. The division you envisage (“The software running on the phone should be representing the owner of the phone, period.”) is wishful thinking. Do you think the JavaScript in your browser does only things in your interest?
A state of affairs where users' devices encrypt files, and then iCloud scans the stored blobs to perform a perfunctory compliance check is clearly not impossible. So please describe what you mean.
Web javascript is one of the places the battle is being fought. Users are being pushed into running javascript (and HTML) that acts directly against our own interests (eg ads, surveillance, etc). Many of the capabilities exploited by the hostile code should be considered browser security vulnerabilities, but the dynamic is not helped by one of the main surveillance companies also making one of the main browsers.
But regardless of the regime the authoritarians are trying to push, the computer-represents-user model is what we should aspire to - the alternative is computational disenfranchisement.
