EDIT: Whether or not Apple should be scanning for CSAM in some way is an entirely separate argument to whether it should be "on device" or "in cloud". That's not obvious, so my explanation below explains why that is the case.

I disagree. On-device scanning is desirable here and scanning it in iCloud though the industry-norm, is not desirable.

Apple specifically stated they would only scan the photos being uploaded to iCloud [1] and not local photos which were not being uploaded.

Most cloud storage providers are scanning in the cloud, this necessitates a workflow where both the photos and decryption keys are accessible by the same server and that there is a security workflow to request the users decryption keys without the user involved (by way of their account password, or other enforcement mechanisms designed to ensure only the real user can access such keys, Apple has previously detailed Hardware HSM enforced details of that for iCloud in their Apple Platform Security guide [2]).

By extension that opens up the potential for a malicious employee or third-party to either intercept those photos while being scanned or otherwise allows a workflow that could be exploited to request the keys and photos. This is a major loss of security and privacy which Apple is specifically and intentionally designing to avoid. Until now iCloud Backups were a major weakness in that story however they also today announced they are fixing that [3].

Hence: the on-device scanning was just an entirely technical solution to scanning "only photos uploaded to icloud" (like everyone else) while also "ensuring some server in icloud can't decrypt your photos".

You could of course argue that it makes a later change of policy to scan local-only photos easier. While this is true, Apple could decide to add code to iOS to do anything they want at any time, so they could just decide to do that anyway, even if they were scanning iCloud photos in the cloud. At the same time, by not scanning them in the cloud, they have a technical solution to ensure it's much harder for a malicious actor to get unauthorised access to iCloud user photos. Because there is no place/server that is "supposed" to be able to access both the photos and the keys.

[1] https://www.apple.com/child-safety/pdf/Expanded_Protections_... [2] https://help.apple.com/pdf/security/en_US/apple-platform-sec... [3] https://news.ycombinator.com/item?id=33897793 "Apple introduces end-to-end encryption for backups"