Why he wouldn't give them the password even if there is no child porn there
A reason why he would not give them the password, even if there is no child porn in the encrypted files, is because there might be something else in there that could incriminate him of a different crime.
To take an example (to choose a popular one), there are copyrighted films or songs there.
Now this may cost him a huge fine (and maybe a prison sentence?) Whereas if he ran the "can't incriminate myself" defense throught the courts and won, he gets away with it.
And yes, that would mean he is innocent of the crime they accused him of (having encrypted child porn), but has incriminated himself as guilty of another crime they didn't know he had done. Hence the constitutional protection.
Perhaps you say that he is still guilty, so who cares? Take another example then. He has files in there that suggest he is guilty of tax evasion. He knows that he is innocent, he is certain that he can prove he is innocent, but also knows that it would probably take some time in jail (or a big bail bond) and a huge legal fight to do so. It is therefore better in his case to run the "can't incriminate myself" defense, even though there is no child porn there and he is innocent of everything else.