As you can see from this discussion, there are a lot of technically knowledgeable people who did not find this "plainly obvious". It's disingenuous to blame users for Apple's misleading marketing.
But when you send a backup, it's decrypted, sent to Apple, and then re-encrypted with a key that Apple controls, and has nothing to do with any of the "things I personally know"? IOW, I couldn't myself decrypt my Apple backup stored on their servers?
My phone, my data.
Back up my data to their computer, their control.
This is perfect plausible deniability for them.
"Hey, we gave them a secure device. But they chose to upload their data to us, and we made it clear how we handle it in our terms of service."
Which it is.
You could build a system where there's a key stored on each of your devices, and your password also acts like a key. In that case, you could
- Lose all your devices, but unlock with password
- Forget your password, but unlock with any device
- Lose one device, but unlock with your password or any other device
Of course, most people's passwords would probably be way to weak, no matter how much time Apple spends stretching it into a key, but for people who use a decent password this would be fairly secure.
iCloud backups are definitely encrypted. They just aren't end-to-end encrypted.
That should have been plainly obvious to any technically knowledgeable user because you don't lose your data forever when you forget your Apple ID password. Or the fact that you can see your photos through a web browser on icloud.com