This is a policy issue in both cases - policy can change (for the worse) in both cases.
The comparison is about unencrypted photos in iCloud or this other method that reveals less user information by running some parts of it client side (only if iCloud photos are enabled) and could allow for e2e encryption on the server.
The argument of "but they could change it to be worse!" applies to any implementation and any policy. That's why the specifics matter imo. Apple controls the OS and distribution, governments control the legislation (which is hopefully correlated with the public interest). The existing 'megacorp' model doesn't have a non-policy defense to this kind of thing so it's always an argument about policy. In this specific implementation I think the policy is fine. That may not hold if they try to use it for something else (at which point it's worth fighting against whatever that bad policy is).
Apple's good solutions to the CSAM problem (which I think thread the needle for a decent compromise) could prevent worse policy from the government later (attempts to ban encryption or require key escrow like in the 90s).
Basically what I said here: https://news.ycombinator.com/item?id=28162418
This implementation as it stands reveals less information about end users and could allow them to enable e2ee for photos on their servers - that's a better outcome than the current state (imo).