By doing the scan on your phone, Apple is using your phone‘s battery and processor to do the work that Google and Microsoft etc. carry out on their servers. Every image that goes to iCloud is now a drain on your battery and a reduction in its life. I think that is the cost that folk are referring to.
Apple runs iCloud storage from Amazon and Google servers, which costs them millions per month.
Apple is a big spender on Amazon's cloud — and that isn't going to change anytime soon.
www.cnbc.com
Apple has been using Microsoft's Azure and Amazon's S3 to store encrypted portions of some iOS files for the past few years. But Apple is now using Google Cloud for some storage needs.
www.zdnet.com
The problem could be that running services to scan for CSAM on those servers would increase this cost, and Apple is not keen on paying. It would also require that Apple sends the file in an unencrypted format to the servers for scanning.
The other problem is that Apple totally failed to read the room. People don’t really care that their photos are unencrypted. But they do care about their personal devices spying and reporting them without warning then first. Folk care that Apple is assuming they’re guilty of something abhorrent then showing their photos to perfect strangers.
Whodathunkit?
… none of which has anything to do with this article.