And to specifically answer the question of what they can do. When the police come with a warrant because they have good reason to suspect some customer X is storing and/or transmitting child porn, then transmit a covert over the air update to that customer's device and that customer's device only, scanning photos on-device before they get encrypted for iCloud backup. Don't push the surveillance update to every single customer on the planet before they're under any suspicion and this suspicion has been certified by a judge just in case.
You're getting pretty far into "affirming the consequent" territory here.
But what else could they meaningfully do?
I've never seen a single person ask this question in good faith. It never stops. Every single day we have a new crisis involving children and the solution is surveillance, more government control, less freedom, whatever.
Nothing but emotional manipulation. None of this will ever stop crime. None of this will ever undo the suffering already inflicted. All of this is mainly justified by the debatable notion that demand for CSAM causes child molestation, the actual crime authorities should be trying to prevent. Instead of doing that they use children in order to establish the surveillance tools needed for government oppression. Using children as a political weapon should be considered child abuse as well.
Note that Apple doesn't do end-to-end encryption, there's little evidence they are even thinking about it, and there are other issues that would stand in their way if they had tried to. Under the current system, we get client-side scanning and server-side scanning whenever Apple feels like it. Right now, there's no privacy benefit other than the made-up one some Apple fans invented from thin air.
>So they came up with a system that they felt was a good compromise between privacy and trying to stop the spread of CSAM.
It's a terrible 'compromise'. In return for a bad precedent, they get a system that catches way less cases than the typical server-based ones. Unless Apple expands the system further to catch these cases too, in which point one should ask how much privacy is really kept.
How long do you expect that policy to realistically hold when some three-letter-agency comes knocking?
And Apple cannot stop exploitation of children. Anything they try is trivial to circumvent, a massive breach of privacy, or both.
If the answer is "no, it's not Apple's job." then of course these plans are terrible.
If the answer is "yes, Apple should try to use it's immense power and wealth to try to stop a terrible evil" - then the obvious follow up question is "How?".
They could do whatever ever other company is doing and just looking at all of your data, but Apple didn't want to do that. So they came up with a system that they felt was a good compromise between privacy and trying to stop the spread of CSAM. If you want to quibble about the implementation details, that's fine. But if your position is that they shouldn't be looking at your data at all, then you have to go back to the first question and say "Apple should not be trying to stop the exploitation of children."
Now you might say, "Yes, but 'what about the children?' has been used to justify terrible things." Granted. But... "what about the children?" is a very important question to ask and shouldn't be used as a cliche to dismiss Apple's attempt to make the world a better place in this area.