You have a good point that there are various options, but none are scalable for tens of millions of devices sold to the public and not managed by some competent trusted IT group.
However, one approach that would answer some of the criticism is to make the cryptographic key stored in the chips in such a way that you could gain physical access by grinding down the package and using a scanning electron microscope to read it. The advantages of this approach are:
1) You need physical access, so its not a remote hack that anyone can pull off. Thus there is no master key to be leaked or shared with undesirables[*].
2) It is expensive and destructive, so you need a good targeted reason to use it. That puts it beyond trawling for evidence, and out of the reach of common criminals.
3) The customers of said phones, etc, largely have put faith in not losing the device, and if lost, it is not in the hands of a highly resourced thief, rather than a company that might be pressured to share master keys with practically every government and police organisation in the world.
[*] undesirables may vary, check your country and current political climate for the recent list.