"Hey, we're really sorry about fluxquanta's passing. Here is his private data which he may or may not have wanted you to see (but we'll just assume that he did). Aren't we such a caring company? Since we can no longer count on him to give us more money when our next product comes out, keep us and our incredibly kind gesture of digging through the skeleton closets of the dead in mind when shopping for your next device."
In absence of a will it would be terrible to assume that a person meant to have all their assets destroyed instead of handed down. It should be an explicit opt-in. The default should be, your stuff is recoverable and inheritable.
That seems like a weird assumption, that there'd be a single person with access to an account containing the only copies of decades of family photos. If someone else has account access or if there are copies of the photos elsewhere, then "destroy-when-I-die" isn't a big problem.
On the other hand, it also violates the way that I think things would usually work in the physical world. That is, if there's a safe that only the deceased had the combination to, I can still drill it to access the contents.
It would be a pretty big bummer for most families if when a family member passed away so did all those memories. That's probably not what they would have wanted. Or even if they just forgot their password.. that when they reset it all their photos go poof.
You are I might understand the consequences, but for most people it should really be a clear opt-in to "you can turn on totally unhackable encryption, but if you lose your pw you are totally screwed".
In the case of sudden death, there would not have been any way to securely dispose of any private "data". So your private information, diaries, works you purposefully didn't publish, unfinished manuscripts you abandoned - everything was handed down to your estate, and more often than not used against your intent.
I'm not entirely clear whether your will could specify such disposal to be done, or could prohibit people from at least publishing these private notes and letters if not reading them, in any kind of binding and permanent way.
Shared photo streams are only a solution if they are used. Most people don't even write wills.
If you fail to write a will should the state just burn all your assets, assuming that's what you meant? No, that's the wrong default. Burn-when-I-die should be opt-in for specific assets, not the default.
And the good news is Apple is providing opt-in options like secure notes. Perhaps even backups too (3rd parties already do). But only after presenting the user with a big disclaimer informing them of the severe consequences of losing the password.
