How Touch ID unlocks an iOS device
If Touch ID is turned off, when a device locks, the keys for Data Protection class Complete, which are held in the Secure Enclave, are discarded. The files and keychain items in that class are inaccessible until the user unlocks the device by entering his or her passcode.
With Touch ID turned on, the keys are not discarded when the device locks; instead, they’re wrapped with a key that is given to the Touch ID subsystem inside the Secure Enclave. When a user attempts to unlock the device, if Touch ID recognizes the user’s ngerprint, it provides the key for unwrapping the Data Protection keys, and the device is unlocked. This process provides additional protection by requiring the
Data Protection and Touch ID subsystems to cooperate in order to unlock the device.
The keys needed for Touch ID to unlock the device are lost if the device reboots and are discarded by the Secure Enclave after 48 hours or ve failed Touch ID recognition attempts.
In specific, the Secure Enclave holds the master keys for the Complete Data Protection class that controls your files.
But this is not true on the iPhone 5C. This means that the requests from the FBI are technically feasible. It could comply with this order, and there's good backup for that. Being technically able to comply, though, doesn't indicate that it's morally required to do so.
Specifically, Apple would need to write a tool that would replace DFU mode on the given device - since DFU mode currently doesn't permit this - and it would need to be a new forensic tool written from scratch and at substantial cost that would permit someone to run a RAM-only signed bootloader that would permit the FBI unlimited attempts at the PIN.
They're asking for the keys to the kingdom. And they should be denied.
If you live in the United States, do me a favor: write to your congresspersons and senators and tell them that the government should not be in the business of compelling back doors in encryption technologies that keep our data out of the hands of hackers, foreign governments, or even friendly governments. Not sure who represents you? Here's an easy lookup. And, if you felt extra rabble-rousey when you did it, ask them to support H.R. 317/S. 1688 which gives my representative in Congress an actual vote.
While this particular request is grantable (and attacks against A7 phones and later is not), it shouldn't be granted, because we should not be giving anyone the ability to crack a locked iPhone, because developing those tools is admitting that they should be given to any government, not just ours.