And yet, there's no issue with "We'll let apple take the device, flash a custom OS onto it, and allow us to make attempts remotely while not having physical access to the device".
That's what they're asking for. Part of the FBI's argument is that they need the information for safety of our country, not specifically for the trial.
The FBI specifically asked for a version of iOS that would be loaded into memory and not modify any of the information on the flash. One of Apple's arguments about why the request is an undue burden is that iOS doesn't normally work like that and it would take a lot of effort to make it work like that.
The FBI said it would be acceptable for Apple to retain possession of the phone while it was running the customized version of iOS out of RAM in order to prevent the custom iOS from falling into their hands.
> The FBI said it would be acceptable for Apple to retain possession of the phone...
However... in that case the FBI will have remote access to the phone in question to run whatever software tools against it they require. (This requirement is in the order. :) )
Given that "prevent iOS from reading the ROM used to boot the iDevice" probably isn't a threat that Apple considered to be a serious one, it's entirely possible that the FBI (or an agent of another TLA embedded within the FBI) could use this remote access to also gain access to Apple's (signed!) PIN entry delay and self-destruct removal modifications.
If this happens, and there's a way to bypass whatever mechanism Apple used in the modified image to make it run only on that single iPhone, then Apple has just unwittingly (and unwillingly) handed a backdoor to any iPhone of that model to FedGov (along with any other governments that have clandestine access to the systems of the TLAs in question).
That's what they're asking for. Part of the FBI's argument is that they need the information for safety of our country, not specifically for the trial.