You're misunderstanding the proposed system. The entire system as-described only runs on content that's in the process of being uploaded to Apple -- it's part of the iCloud Photos upload system. Apple stores all this content encrypted on their servers, but it's not E2E so they have a key.

This entire system was a way for Apple to avoid decrypting your photos on their servers and scanning them there.

Hypothetically, if Apple implemented this system and switched to E2E for the photo storage, you'd be more private overall because Apple would be incapable of seeing anything about your photos until you tripped these hash matches, as opposed to the status quo where they can look at any of your photos whenever they feel like it. (And the hash matches only include a "visual derivative" which we assume means a low res thumbnail.) I say hypothetically because Apple never said this was their plan.

You can argue about whether or not Apple should be doing this. But it does seem to be fairly standard in the cloud file storage industry.

I never heard that Apple was decrypting the original content at all. That implies that there is a team at Apple looking at child pornography all day. Not sure how that's even legal. It was my understanding that CSAM systems were simply hash based and 'hits' were reported to authorities. Do you have a source for them decrypting information?

Here's a summary of how their proposed system was supposed to work: https://educatedguesswork.org/posts/apple-csam-intro/ (if you want to skim it, search for mentions of "manual review" and "visual derivative")

I suspect the key would be that there'd be a team verifying that something is actually child pornography, because the system is a perceptual hash rather than a strict comparing-bytes so before someone looks at it they're not certain.