Isn't it possible that iCloud backups are encrypted in storage? Apple could be holding the key in encrypted form and sending that to the device with a backup. If the user's password is used as the passphrase to the key, then only the user can use the key to decrypt it. Apple could hold a second key, with passphrases set to secret answers for reset scenarios - that would let them regenerate the normal password-encrypted key for the chosen changed password.

This seems likely given they offer to store your key for FileVault[1] under some secret answers. I think this delivers the same level of "secure" in the sense that, provided they don't store the passwords you submit (possible law enforcement request), then they shouldn't be able to decrypt your iCloud backups either.

1: http://support.apple.com/kb/ht4790