Yes, it is a defect. For many reasons
- it's anti-user: a device spying on you and reporting back to a centralized server is a bad look
- it's a slippery slope: talking about releasing this caused them to get requests from governments to consider including "dissident" information
- it's prone to abuse: within days, the hashing mechanism they were proposing was reverse engineered and false positives were embedded in innocent images
- it assumes guilt across the population: what happened to innocent by default?
and yes, csam is a huge problem. And btw, apple DOES currently scan for it- if you share an album (and thus decrypt it), it is scanned for CSAM.