Also, it's actually pretty easy to mess with Android and get it un-googled. Google don't make most Android phones, so there's less hardware-level enforcement of rules, and more independent alternatives. This is less so for Apple devices. If Apple decides to do something you don't like to your phone, you are SOL; you can only accept it or ditch Apple and switch to Android/something else.
Well, technically this is still true. Files you are putting to iCloud by yourself voluntarily are not staying in your iPhone in the first hand. Everything which is against this, is only speculation currently.
If you don't trust that, that is another story. System is full black box.
Am I missing something more than "but it's happening on-device!"?
Your answer is "no".
It's not whether it happens on-device, off-device, in the cloud, in the tubes, or anywhere.
It's that Apple said that they would not do this, and now they're doing this. You can make technical quibbles that what they promised was slightly different to what they're doing, but they're irrelevant. The core promise of "what happens on your iPhone stays on your iPhone" is being broken. It's that breaking of the promise that people are angry about. Does that make sense?
People think that this kind of capability was not there already, while it was. The simplest example case is normal iCloud sync. It scans your files and gets metadata, finally comparing to cloud to know which files to sync.
Other concern is, that this can be easily expanded to other kind of content, or whole device (outside of iCloud files). While, this sounds like valid concern, government who can force this change, could have forced it already. "Technology does not exist" is not valid excuse, never was. There are pretty expensive consults used by politics to prove these excuses otherwise.
The whole premise is that Google and Facebook and everyone else are just doing this on the unencrypted photos you upload, in their cloud, with their own (presumably, but correct me if I'm wrong) undocumented algorithms and datasets.
Now here comes Apple, documenting almost everything except the dataset itself, and everyone is freaking out because it's happening on your own device. But then it's encrypting the whole thing and uploading it to Apple where they presumably do no additional scanning.
What is the actual difference if it's being looked for on-device vs. by the provider? Supposedly in preparation for a bigger push of encryption of the photos themselves, if they are not already encrypted in the cloud.
Am I missing something more than "but it's happening on-device!"?