News agencies get things wrong. 'Sources' are often times extremely unreliable, or don't always present the whole picture. Not that I'm absolving Apple here, just that I've been indirectly on the receiving end of 'sources' and Reuters being technically right, but very, very wrong.
One important implication of not using full encryption is that it protects users from themselves. If a user forgets their password, Apple can still unlock their data. From a security perspective, this obviously isn't ideal. But, from the perspective of the average user who has lost all of their data, this is great.
I should be given the choice to turn it on though. I understand Apple not wanting to deal with the annoying customer who forgets their password, loses everything, and blames Apple. I’ve seen enough forgotten password people while waiting at the Genius Bar to sympathize with Apple. But just because some of their customers can’t handle the responsibility doesn’t mean none of their customers should have the option. I encrypt my hard drive despite Apple’s warnings about FireVault. I understand the risk, have weighed the pros and cons, and have taken steps to mitigate the risk.
It is very typical of Apple, unfortunately, to leave out power features in order to focus on excelling at the basics. I switched to an iPhone from a rooted Android a few years ago, and while I do miss that level of control, I don't have to worry about the overhead that that type of Android device commands.
This. As an example, my mother (who is over 90) got locked out of her icloud account a couple years ago, from getting unexpected password prompts on her ipad and not understanding which password was required, she entered the wrong one too many times. We had recorded our answers to the “security questions” when setting up the account, but they were not accepted either. In the end, we managed to restore access via a rather cumbersome process. No complaints about that, of course; the important part is that she did get her access back in the end.