That has already happened. Only instead of handing over data on specific users upon request, Apple has simply handed over all iCloud data of all its (mainland) Chinese users to a government owned company:
EDIT: s/against/for/
The frog, in reality, just jumps out of the pot when the water gets too hot.
Empirically, slippery slopes have always been an extremely common way change is driven in mass social thinking. This has been formalized as the "Overton window": https://en.wikipedia.org/wiki/Overton_window
Saying, "We're still three steps from my issue but this thing that, in and of itself I have no problem with, can't happen because it might lead to the thing I have a problem with." is not a valid argument.
To try and bring it back into focus, it's a real problem that this "one pic" isn't being shown. It's not a slippery slope conversation, because we're already at the thing I/we have a problem with. No need to argue the "this paves the way for worse things" because this is the worse thing! We're here!
At the same time it's a good gauge for them to figure out what else they can do.
Start with "hey man don't show that one pic" and the company figures "it's one pic, whatever we're not really compromising our values".
A few more steps and then it seems less dramatic when it comes to "give us that information on that one user"... and so on.
Personally I would expect an external social credit score coming soon too. It doesn't have to be all encompassing like the social credit score, but good luck getting a job with a company who wants to work with China if you're on the list...