My understanding (high level) is their system is designed to improve user privacy by meaning they don't need to be able to decrypt photos on iCloud (which is, if I understand correctly, how other cloud providers do this scanning, which they are required to do by law?), but rather do it on the device - without going in to the upsides and downsides of either approach, I'm surprised they didn't manage to communicate more clearly in the initial messaging that this is a "privacy" feature and why they are taking this approach, and instead are left dealing with some quite negative press.