So, they were unable to provide the access they wanted to provide (for video decoders, at least), on the previous (then current) architecture.
Considering HDCP came later, it might have just been slapped as a side module and some of their math magic might be offloaded to GPU even. I remember having old ATI drivers having a very cinematic look when video was accelerated by the GPU itself (it was surreally beautiful), but they had to throw all this machinery out from the driver when they started to modernize their stack (and they broke video playback for months due to not supporting proper overlay formats).
Similarly, I think closed source drivers were programming some of the cards during initialization, because I remember they're talking about moving all this init step to the BIOS itself, and opening some doors on the BIOS to tweak the card during the init (clocks, fans, temp reads, etc. IIRC) for allowing OS and open drivers to play nicer and with less effort with the cards in the long run.
The details are hazy, because these transitions were made almost a decade ago if not longer. However, while NVIDIA was playing the deaf, and Intel was just starting to provide good open drivers for their IGPs, AMDs move as a prime GPU vendor brought a lot of good light to them.
If you want, I can try to dig the history and create a timeline for you, but it might not be an immediate endeavor.
I'm just quite confused as to how HDCP factors into all that. HDCP really is just a hardware block that's part of the video output which you enable or disable; there is a bunch of nonsense associated with PAVP and other such stuff on Windows, but none of that should really matter to Linux, nor should whatever way HDCP is implemented affect other features of the open drivers. AMD certainly do deserve credit for their work on Linux support, I just find your specific HDCP story quite strange :-)
Ultimately the open driver should always be able to do all the same things the closed driver does and get the same result. If there are any secrets in the closed driver that "can't" be exposed, that's a security flaw in the design.