Reread Apple's security papers. Much of what's "encrypted on their servers" is encrypted in ways deliberately designed to make it untenable for Apple to decrypt. For instance, material in iCloud is encrypted with a key derived from your device PIN. So concerned is Apple with maintaining their inability to decrypt, even with a brute-force search on the PIN space, that they've contrived an elaborate quorum scheme of HSMs to manage the key space and count failure attempts. Nobody does this and Apple could have stopped here and rightly claimed the most secure large-scale cloud architecture of any mainstream tech company. But they didn't. They used programmable HSMs to implement the system and were concerned that a serious power bent on coercing Apple would target the HSMs. So, once they get the systems deployed, the admins meet and run the programming keys for the HSM through a "physical one way hash function".
On stage at Black Hat, Ivan Krstic claims that hash function to have been a Vitamix blender.
Almost always, when companies claim to encrypt things serverside, they're doing something shady. And it is always preferable that secrets be kept on devices and never touch servers. But Apple is taking the problem seriously.