They aren’t asking Apple to turn over the data they have (Apple did that). They want Apple to create software that breaks all the protections on a phone. First, they’re demanding action, which is a VERY extreme action on a third party (and probably very expensive action). Second, they’re demanding that action be used to create a skeleton key that opens every iPhone ever made.
Imagine that instead of a phone, the data was in a Hamilton Products safe. It’s their new model, virtually uncrackable, and with a failsafe to destroy any papers inside if it’s being tempered with. And the FBI says “we need you to create a master key that will unlock any of these safes — don’t worry, you can keep it, we’ll just call you when we have these safes and it’s only this one case with really sensitive data”. You think Hamilton is going to say “Yes sir, master key coming up!” And what happens to sales of Hamilton Products safes when word gets out that they have a master key that is available for any warrant.
What works? Privacy. Yeah, investigators will have to work harder for the info they need (and they did get a lot from the iCloud backups). But if the encryption can be broken for the FBI, it can be broken by China, by Russian hackers, by the crooks looking to steal info for identity theft, the script kiddies looking for thrills. Breakable encryption is no encryption. I don’t want to live in a glass house — do you?