They had already built it. That is creepy enough. They really built a technology that did not scan files in the iCloud (which would not work, as the files are encrypted), but on the user's devices. And they even wanted to inform authorities, if they found something. Imagine your plumber is actively searching your whole home for child porn and reports it to the authorities if he finds any.
Apple does not really understand the concept of privacy, if it comes up with stuff like that. Searching people's devices is like searching people's homes. Usually those devices have mich more private information than the rest of the home combined. That's why it also is quite problematic that US authorities sometimes want to check the private notebooks of foreign travellers. That simply is none of their business.
Some information even is more private that a nude photo for example. We prefer not to be nude amongst others, because they could see something that we want to keep private. However we basically know how a nude person looks. We would not learn a lot of new stuff if we see somebody nude. If we get access to his phone or notebook though, we learn more about that person than even his friends and family know. Digital information is extremely private. It is like an extension of your own brain where you store things that you do not want to forget. So getting access to that information against a person's will is much worse than secretly taking nude photos of her. Those devices should be safe spaces.
Apple says that the system can't be used for other things than detecting child porn, but of cause that is not true. You can create hash values for any kind of photos. The problem is that in the US authorities can force companies to help them. If that happens, those authorities usually issue a gag order. That means that the company executives - even Tim Cook - would face a long jail time, if they ever talk about that request. That's why we should treat any US company as an extension of law enforcement. Especially the large ones like Meta, Apple, Alphabet and Microsoft.