I interpret as the OP does. The court document asks Apple to lock the particular image to a particular serial number, so if all goes according to plan, the same image could not unlock other iPhones. Obviously, writing security code on a short deadline does not make for the best security, so that's one worry.
But Apple's letter uses the expression "technique", which I think means they're worried the government will get another court to make them change the serial number and sign a new image "next time". Before you know it, Apple will have to have an entire department to make these one-off images. Someone will say, "you know, you could save yourself a lot of time if you just made it work on any phone." Then that image will be leaked, and their security guarantees will be dead. (One might also worry about the DRM implications.)
"Specifically, the FBI wants us to make a new version of the iPhone operating system, circumventing several important security features, and install it on an iPhone recovered during the investigation. In the wrong hands, this software — which does not exist today — would have the potential to unlock any iPhone in someone’s physical possession."
Apple's argument isn't about a deluge of one-off court orders creating a slippery slope to reducing security. Apple is claiming that complying with just this one request would make Apple's other iPhone users significantly less secure. There would be a piece of software, signed by Apple, that could potentially be used to unlock any iPhone you have in your physical possession.
"Apple's reasonable technical assistance may include, but is not limited to: providing the FBI with a signed iPhone Software file, recovery bundle, or other Software Image File ("SIF") that can be loaded onto the SUBJECT DEVICE. The SIF will load and run from Random Access Memory and will not modify the iOS on the actual phone, the user data partition or system partition on the device's flash memory. The SIF will be coded by Apple with a unique identifier of the phone so that the SIF would only load and execute on the SUBJECT DEVICE."
"But Apple's letter uses the expression "technique", which I think means they're worried the government will get another court to make them change the serial number and sign a new image "next time""
Apple's letter directly claims that the particular piece of software created to comply with this request will reduce the security of it's users. Obviously this means that Apple does not think that the SIF being hardcoded with the unique identifier of the phone (sufficiently) mitigates the risk.
"make no mistake: Building a version of iOS that bypasses security in this way would undeniably create a backdoor. And while the government may argue that its use would be limited to this case, there is no way to guarantee such control."
Having re-read the OP more carefully, I think ghshephard is making a different claim than you. He is pointing out Apple's arugment about the 'unprecedented use of the All Writs Act of 1789'. If Apple can be forced to compromise their security via court order like this, the FBI gains the power to force Apple and any other US company to insert backdoors / decrease security.
"If the government can use the All Writs Act to make it easier to unlock your iPhone, it would have the power to reach into anyone’s device to capture their data. The government could extend this breach of privacy and demand that Apple build surveillance software to intercept your messages, access your health records or financial data, track your location, or even access your phone’s microphone or camera without your knowledge."
But Apple's letter uses the expression "technique", which I think means they're worried the government will get another court to make them change the serial number and sign a new image "next time". Before you know it, Apple will have to have an entire department to make these one-off images. Someone will say, "you know, you could save yourself a lot of time if you just made it work on any phone." Then that image will be leaked, and their security guarantees will be dead. (One might also worry about the DRM implications.)