I think Apple's most concerned about setting a bad precedent that it can be ordered to work to remove the security protections it inserted in iPhones. Right now, the request is that they generate firmware that sends keys to a piece of hardware without extra rate limiting. In 5S and later phones, there's a secure enclave that makes it much harder to do the passcode testing, since the enclave itself performs rate limiting.
But in the future, Apple MIGHT find itself ordered to make use of any bugs it later discovers in the enclave, or even to physically modify an enclave, to allow the same types of attacks on a more secure phone. And they might be required to turn over the resulting firmware to the FBI to use on other phones (along with keys to allow the FBI to sign it for other phones). Apple no doubt wants to stop from even starting going down this slippery slope.
Also, note that although the keys used to encrypt flash data are highly random AES keys, those keys are protected only by the passcode, and for most people, those passcode are way too small (4-6 digits). So, while someone who's really careful could make it very hard for the FBI to break into a phone, even with Apple's help, a novice (99.99999% of Apple users) would use a passcode from a much smaller space, conceivably small enough that with Apple's help, and a few bugs in the enclave here or there, the FBI could break into the phone.
Most significantly, this level of detail is way too technical for nearly everyone following this story. To them, the question is going to be a very simple "Are iPhones secure from the government, or are they not?" Apple wants the answer to that to be "Yes, they're secure."