And it seems to mean that any password can now be presumed to be incriminating evidence. What happens if my company gets investigated for some financial fraud and they find a forgotten password protected usb stick in the back of a drawer. Now the prosecutors can threaten me with jail time unless I prove that I do not know the password to that usb stick. How can I begin to mount a defence to that? That presumption of guilty until proven innocent is whats wrong here.
You leave a lot of details out of your example. Such as, where you low level developer or a financial officer responsible for the company finances? If you were the latter, there would be ample suspicion to think a locked USB stick in your drawer would be useful evidence in the case. If you were a low level developer, probably not so much. You have to build context to determine if someone should be considered suspicious.
"He was already in jail for being part of a cell that considered attacking a Territorial Army base in the town."
or this part of the story:
"Hussain and three other men were jailed in 2012 after admitting discussing attacking the town's TA headquarters by placing a homemade bomb on to a remote controlled toy car."
Not exactly a flimsy accusation. They had ample reason to believe the USB stick may contain additional plans for other attacks. Without knowing if there were others involved, I'd say they were right justified in what they did.