Incorrect. "Key" in relation to "backdoor" and "security mechanism" does not always mean "encryption key." You are confused because there are more than one security measures at work. This removes the key to one of them, completely circumvents it instead of going through that "door," so to speak. That is a backdoor. It's a very important security measure too, as evidenced by the fact that it's the only one they need to have removed.
It is UNDENIABLY a back-door around the self-destruct/lockout mechanism designed to prevent brute-force attacks. It is undeniable that this could be used on anyone's iOS device if it could be used on these particular phones. They are literally asking Apple to open the locked doors to millions of innocent customers. It's not OK. That is like having a general warrant. Even if they leave control of it in Apple's hands, Apple will have been forced to circumvent the very security they worked hard to create and it will affect the potential business success they had gone through the effort to obtain.