If I understand correctly, any piece of software that would be used would need to be signed by Apple. Furthermore, the FBI's warrant(?) says specifically that i

If I understand correctly, any piece of software that would be used would need to be signed by Apple. Furthermore, the FBI's warrant(?) says specifically that it would only need to work for one device ID. Thus it would be relatively straightforward to create an update for the FBI that could pretty clearly only be used on the phone in question. Unless the FBI had Apple's signing key they could not reuse the software (assuming they couldn't break the bootloader chain of trust, which they apparently cannot if this is the route they are taking). Capability is not the grounds on which they are arguing. This is a very clearly political refusal. Apple is saying that about as explicitly as they can in this message. Whether or not they can do it, Apple doesn't want to be caught in the game of being a government surrogate or having to determine for themselves if government requests are legitimate (imagine, say, if the Chinese government asked for data from a dissident's phone - would Apple want to risk that market by denying a request that they have complied with in the US?). It's unfortunate for them that the FBI is making this request while people still own phones like the 5c for which they could theoretically disable security features, as opposed to the newer phones which it is possible they are completely unable to defeat.