I think you might be incorrect about #5. Or maybe it's a semantic issue. The hash matching happens on your device whether you have iCloud Photos enabled or not. I've read everything, including some of the deeper technical articles, and seen nothing to show me otherwise.
Have you read this? It's an interesting take from someone who knows their stuff (you've probably already seen it):
http://www.hackerfactor.com/blog/index.php?/archives/929-One-Bad-Apple.html
I agree with you, and others,
completely that there is some serious FUD and misinformation being spread about this. However, I don't think you can be as quick to dismiss some of the rational concerns being brought up here, and I'd be curious your take on this hypothetical scenario:
There is a rampant problem with theft in the world. Because of that, my homeowner's association has a new device that they're going to require all homeowners in our neighborhood to have in their homes. That device can scan every barcode that comes into the house and label it as legit, or match it up with barcodes in a stolen database housed elsewhere. As long as the stolen item stays in my home, the device stays quiet. But if the item leaves my house, the device immediately reaches out to local police to let them know it's out there. By the way, if you don't want to participate in this, simply never take any items out of your house and you'll be fine, the device will remain dormant and quiet.
While I realize that's not a perfect analogy, it's very similar in concept. I think the problem that I (and others trying to stay rational here) have with this change, is that they're stepping into my personal space, so to speak, to implement this change. To stick with that analogy, I don't believe I should be required to allow that device in my house in order to take things I own wherever I want to take them. Why not let the police do their job and track down the stolen devices, get a warrant to search my house, and then come find it/me?
I'm 100% fine if Apple decided to implement this exact same process with everything uploaded to iCloud. It's on their servers at that point, so they have every right to take steps to find that filth, and should be able to implement the exact same secure process. Yes, they would have the encryption keys, but they have them already, and we already trust them with that. So why do this massive encryption workaround just to do the scanning on my device?