If they don't have a case without the contents on the drive then they don't have a case! I scoff at the prosecutors that claim "but if we can't get the encrypted contents then criminals will get away!" Hey dipsticks! Maybe you should collect other evidence and maybe make sure you build up a case that doesn't strictly rely on the contents of a hard drive that you don't even have possession of. Okay, so lets say you get the drive decrpyted... how you gonna prove who/how the contents got on the drive?
In the case of US vs Fricosu, merely having the documents the government says exist on the encrypted drive does not in itself constitute a crime (like child pornography would/does in the case mentioned in this story).
So, if we take a step back and ignore that the person who holds the key to the "safe" (the decryption key to the hard drive) is the defendant and pretend it is you or I that hold the key, then you and I could be compelled to decrypt the drive and disclose its contents or face contempt of court. Now if I was forced by the court to decrypt the drive,prior to doing so I would ask (and require) immunity from any and all evidence found that would/could incriminate me. It also appears the government is aware of a document or documents that exist and have certain contents... this is all they have a warrant for and are asking for.
Change the scenario. The police have reason to believe that there is a gun in a safe that I own that was used in a murder. The have enough evidence to obtain a search warrant and compel me to open the safe. I didn't commit the murder but supposed someone else did. The force compels me to open my safe. Me owning the safe or the gun in itself is not a crime and is not incriminating. Perhaps I have a stash of drugs in my safe too. Prior to opening the safe I will ask for (and require) immunity for any crimes that stem from obtaining or finding any other evidence not listed on their search warrant. I'm sure there will be some back and forth on this as to limit what degree of immunity I actually receive... but believe you me, I will make certain any thing related to the drugs I know exist in there which is completely unrelated to searching for and obtaining a gun. Nothing wring with being compelled to opening the safe.
Take the above scenario with one small change I (or you) the owner of the safe (that contains the gun, or so the government believes) is person accused of the murder. I will still ask for and go after immunity for anything not related to the current case. Owning the safe, and the gun, in itself is not a crime so unlocking the safe and allowing for the search is not incriminating in itself. The government still needs to build a case that I pulled the trigger on the gun and murdered someone (not that I merely knew that I had A gun or that I possessed a gun that I didn't know was used in the commission of a crime).
The sticky point is, how can the government prove that a person knows the combination to a safe (or decryption key for a hard drive)? This is what the judge and court is trying to determine in the Fricosu case. Can she and does she know the key? And if she refuses to unlock it or says she doesn't know how can they "prove" she's lying?
Well, that's exactly the point of the case - if the defendant decrypts it, by that fact he proves he knew the password - meaning, he is the owner of the drive and had control over it. Giving by that to the police proof of both that the content was illegal and that he owned it. Unfortunately for them (but fortunately for the defendant) the court did not go their way.
> how you gonna prove who/how the contents got on the drive?
There's no such thing as 100% proof. It's about being "beyond reasonable doubt", and as 'weaselly' as that might sound, it's true. If they intercept data coming over the wire, to your PC, and you have been the only person home and the chances that someone would plant a few terabytes of illegal data on your drive at those precise times...