> It destroyed the possibility of decrypting the data stored on the iCloud. . .
How so? The data in the cloud - Apple servers - is encrypted.
You missed the news stories that reported that the data on the Cloud is from October, if IIRC. That was the last time that the bad guy copied the data from the phone to the Cloud.
Newer data (up to terror attack) is only on the phone. The up to date data could have been copied onto the Cloud without the passcode and accessed by Apple.
By tampering with the phone the govt put the phone into a state where the phone will no longer copy the post October data to the Cloud without the passcode.
SwordMaker will probably correct any misinformation here.
The KEY is on the iPhone 5C that was linked to that passcode that COULD have been accessed using the AppleID and passcode associated with that iPhone until those FBI BOZOs told the County IT department to change the AppleID on the iPhone's access without knowing what they were doing.
That same passcode is used to build the KEY that is used to encrypt both the data on the iPhone which is eventually uploaded to the iCloud. To extract either, one must be able to re-construct that KEY, either as a normal user would in day-to-day use of the iPhone, or downloading to restore the data from the iCloud. One can also use the AppleID and password to unlock an iPhone, by-passing the lock passcode. . . but the FBI had the IT department CHANGE it. Once it's changed, that option is GONE.