Apple needs to solve it in Apple's garden, which runs by different rules.

Unlike other mobile operating systems, iOS prioritizes protecting the user's privacy. The real user, not just any household member or employer who might have physical access to the device.

In your described solution, what prevents an abusive/sneaky household member from posing as the user and supplying those "user-configurable" keys without the knowledge of the real user? Nothing? That answer wouldn't be good enough for the Apple "garden" as you call it.

If a sneaky household member went and wiped the phone to install those new keys, would the real user not notice that all their data is gone?

The function "replace keys" can have any other programmable feature attached to it. Wiping out all preexisting data, reseting the phone to factory settings, and sending a message to the original owner is all possible and would make any sneaky behavior very un-sneaky. They could even require some form of 2auth or other technique that people use to authorize themselves to banks in order to get the unit-unique key to make the TPM memory rewritable. GPLv3 don't require that installing new keys are easy, but the real owner must have a method to do it.

Complexity begets attacks. Apple's policy is "no rootkits". Allowing the user to modify the system software is basically a backdoor, and backdoors have an undeniable history of being abused by people other than their intended users.

Apple sees the iPhone as a hardware security device. Apple wants users to be confident enough in its security that they can use their phones to authenticate financial transactions.

It's great that some phones are modifyable by their users, but I would never ever link my Android phone with my bank account.

Apple has a rootkit. It is called Apple. If you link your Iphone with your bank, you trust that the Apple won't abuse their position that they hold over you.

Personally I prefer that my hardware security device are controlled and owned by me, not the company that sold the device. Devices not owned by me have an undeniable history of being abused by people who sell such devices, like the case of Lenovo.

If you want to use the history of open devices which their owners can own and control as a case against it, the opposite of company approved software has also a history of abuse. How are all those nice lock down car computers that have been acting creatively during emissions tests. How much trust have they earned, and should people trust them with their bank account for say automatic payment at gas stations?

And how do you prevent the the self-signed "OS image" from being a second-stage bootloader which loads a (rooted) iOS image?