It would set a nasty precedent, but the court is damn right in saying "You can't hold full control over this device and then say you don't feel like controlling this device." - They're going to have to take responsibility for their walled garden.
That topic of contention for the article is only a small point compared to how big they weigh on precedent too here, in that Apple has been for the longest period, happily extracting data and handing it over to the feds at a time that just so happened to be when the rewards for such over-weighed community outcry. Now that privacy has gone much more mainstream, the DoJ really has them by the balls with pointing out that they can't just flop around that easily for free PR. I find it to be some accountability for basing a company's 'ethics' off what is in rather than having a little consistency.
In the short term the precedent would really be nasty, and certainly not beneficial to me as an end user in any way. In the long term however, I think this going through will finally force companies to license rationally once it becomes precedent that jailing the user also means they have to watch their prisons.