I can't think of any reason why its "best" for Apple to keep LEO happy. LEO don't pay them anything and actively increase the difficulty they face running their business as well as reduce the trust the people who do pay them (ie their customers) have for their products, actively hurting their business.
The big fear is that pissing off LEO will result in harmful regulation, and, while that is certainly possible, history has shown the technology moves forward regardless. Consider the US trying to prevent the spread of cryptography. They lost that battle[1], and any government who picks a new battle will eventually lose it, too.
1. The only injuries in that battle were US companies trying to sell software overseas because they were forced to include sub-par crypto.
The amount of money Apple makes from (US) government contracts is utterly insignificant compared to what they make from selling directly to consumers. Which revenue stream do you think they would be least likely to gamble with?
The big fear is that pissing off LEO will result in harmful regulation, and, while that is certainly possible, history has shown the technology moves forward regardless. Consider the US trying to prevent the spread of cryptography. They lost that battle[1], and any government who picks a new battle will eventually lose it, too.
1. The only injuries in that battle were US companies trying to sell software overseas because they were forced to include sub-par crypto.