>They come off looking like complete fools at best, since their huge public spectacle was based on "only Apple can do this," and now that it turns out they could have done it themselves, it just looks like they're incompetent.
No one ever doubted that there was some vulnerability that exists that could be used without Apple's help. There is almost always a vulnerability. The hard part is discovering it. As soon as a third-party told them about it, they paused the case against Apple. The new information changed the facts of the case and made compelling Apple unnecessary. For the FBI to do anything else would have been perjury of the highest order.
That's what makes them look incompetent. They insisted that they couldn't do it without Apple's help. Turns out they could, and they just didn't do their homework first. (Or, if you believe they had ulterior motives, then they didn't want to.)
Those are two radically different values of "know everything" you're pretending are in conflict, there.
Yes, I expect the FBI to "know everything" when it comes to techniques available to do their job. No, I don't expect the FBI to "know everything" when it comes to the contents of my private messages. There's no conflict.
No one ever doubted that there was some vulnerability that exists that could be used without Apple's help. There is almost always a vulnerability. The hard part is discovering it. As soon as a third-party told them about it, they paused the case against Apple. The new information changed the facts of the case and made compelling Apple unnecessary. For the FBI to do anything else would have been perjury of the highest order.