It's fine if you know you want to be the sole person in the world who can get to your data and have the discipline to store master passwords, and you accept Apple support cannot help you even if you have a purchase receipt for the device. But for the average older person that's not a good default.
Apple just needs to design good UX to help these people.
Perhaps a large cardboard 'key' comes with every phone. When first setting up the phone, you scan a QR code on it to encrypt your data with the key, and then you tell the owner that of they ever lose the key to their phone, they won't be able to get in again.
People understand that - it's like losing the only key to a safe.
From time to time you require them to rescan the key to verify they haven't lost it, and if they have, let them generate a new one.
I really like E2E encryption of messages with proper backups on my end. It's good to know the carrier of my messages can't scan them for advertising purpose. But for my phone if I know there is no way to easily get the data back if I have an issue that seems like a major hassle with very little upsides.
It's better if the key is generated when you already have the phone.
For even better security they can instead provide an NFC smartcard or hybrid NFC + USB (like a Yubikey) where the key is stored in hardware and can't be extracted.