Your analysis is incorrect.

The previous stance and enforcement of the usage of safes is that if there is a key that can be picked involving the safe, then the citizen must hand over the key because it will take up government resources and waste taxpayer money to actually perform the act of the picking or tracking down a universal key that works with your safe. Sometimes they just have it handy and use it, other times they don't and the judge will demand you turn it over. If you do not, you are held in contempt of court.

All well and good. however:

Specifically, the FBI wants us to make a new version of the iPhone operating system, circumventing several important security features, and install it on an iPhone recovered during the investigation. In the wrong hands, this software — which does not exist today — would have the potential to unlock any iPhone in someone’s physical possession.

Using the "key" analogy, you're arguing that the courts can compel Apple, the safe manufacturer, to make a key to a customer's safe. That's hardly the same thing as providing an existing key. More than that:

The government suggests this tool could only be used once, on one phone. But that’s simply not true. Once created, the technique could be used over and over again, on any number of devices. In the physical world, it would be the equivalent of a master key, capable of opening hundreds of millions of locks — from restaurants and banks to stores and homes. No reasonable person would find that acceptable.

Apple is arguing that the "key" that the FBI is requesting renders all future safes useless. That's a pretty potent restraint of trade issue. Particularly as a third of Apple's iPhone business is in China:

Strong encryption to prevent a known authoritarian government from spying on its dissidents is the sort of sales feature that stands up pretty strongly in court. The blog post you link demonstrates that the FBI can get into the phone, it's just going to be a costly pain in the ass. Apple admits that they can get into the phone, but it won't just be a costly pain in the ass, it'll be a body blow to the security of their products.

There's essentially direct previous case law on this issue and people are a bit too emotionally charged to realize that we have been losing the encryption debate for the last 15-20 years, and in most cases have already lost.

Au contraire. Apple won just last week.

Under a more appropriate

understanding of the AWA's function as a source of residual authority to issue orders that are

"agreeable to the usages and principles of law," 28 U.S.C. § 1651(a), the relief the government seeks is

unavailable because Congress has considered legislation that would achieve the same result but has not

adopted it. In addition, applicable case law requires me to consider three factors in deciding whether to

issue an order under the AWA: the closeness of Apple's relationship to the underlying criminal

conduct and government investigation; the burden the requested order would impose on Apple; and

the necessity of imposing such a burden on Apple. As explained below, after reviewing the facts in the

record and the parties' arguments, I conclude that none of those factors justifies imposing on Apple

the obligation to assist the government's investigation against its will. I therefore deny the motion.

Not saying this is cut'n'dried. But the ACLU has the right of it: The FBI can get into the phone without Apple's help, which increases exponentially the likelihood that the FBI must get into the phone without Apple's help because of the substantial injury possible through compelling Apple to participate.