As that article, and others on this have pointed out, there are a whole host of reasons why encrypting iCloud data is problematic that have nothing to do with law enforcement. As you have read the article, obviously you must know this very well. In many other areas, they absolutely do encrypt. The fact is encryption sometimes carries down sides, such as an increased risk of users permanently losing access to their data.

Web services companies face a ton of problems operating in China that are really specific to the kinds of services they offer. Apple simply doesn't offer those kinds of services.