Earlier quoted context omitted.
The court accepted evidence that he'd downloaded and shared all manner of such filth, including both technical evidence and testimony from his sister.
Then why couldn't they convict him on that evidence?
The prosecution was able to convince a judge that there is encrypted child pornography on those drives. The judge can't force a jury to accept that (a ruling of fact), but (s)he can make a ruling of law that the defendant no longer has a fifth amendment defense to producing a decrypted version of those drives.