Because this way they can encrypt things on your phone and claim that they can't see your photos once on the server (because whatever they had to do with those photos, was already done on your own phone).

(There are many ways this can be a slippery slope, but we don't have to pretend they could just so what ever body else is doing just as easily and they just want to do it on your phone because they are lazy or whatever. This is a solution to a legitimate problem and also it turns out that people are rightfully worried about what's next; those two facts can coexist)