You're completely right that there are undesirable consequences to mathematically absolute privacy that can't be compromised by any means. But I'd argue that the government has brought this scenario upon itself by blowing up the old system of procedural (rather than mathematical) safeguards.
In the past, Apple had your iMessage data, or at least the ability to decrypt it on-demand. It was understood that this data would be private by default, but would be disclosed to the government through an established, case-by-case process supervised by the courts. Everyone was pretty much OK with this. You and I got our data kept private, unless there was some material, specific reason for the government to suspect it was related to a crime. The government got to dump the data of people under investigation, if a court thought there was good reason to do so.
Then the government went nuclear. They said, here's a National Security Letter that compels you to give us everything you have. Bulk data. Any cooperation that is physically possible. You can't talk about it and you can't appeal to the courts. If you have to capability to MiTM all of your users and pipe everything to us, you have to do it. No oversight, no transparency and no safeguards. Whatever we do with the data is up to us.
In this context, what alternative do tech companies have besides to similarly escalate and build systems that make it physically impossible for them to cooperate?
The government destroyed the social compact between telecom providers and law enforcement with forced, secret bulk surveillance. If the government is willing to step back and make binding, unequivocal commitments that companies that do maintain the ability to decrypt their users' communications won't be forced to secretly use them en masse, maybe we can go back to the old status quo. But the government doesn't seem willing to do that. They want cooperation, but they also want the ability to bust in the back door with an NSL and say "give us everything, on everyone."
The legal system has become so tilted in the government's favour (see: the inability to challenge the constitutionality of bulk surveillance, because you can't prove it happened to you), that companies will no longer trust in the old procedural safeguards. The only thing we can trust is the mathematically proven safety of encryption. And that's the government's fault. So now we are forced to chose between absolute privacy and zero privacy.
So far, I think Apple is making the right choice.