Security theater for marketing purposes. End users have no way of verifying that their cloud backups are encrypted, and Apple is the same company that complied with the NSA's illegal, unconstitutional conspiracy to conduct warrantless bulk surveillance on American citizens and lie about it to congress: PRISM.
Fortunately, no intelligence officials faced any consequences whatsoever for perjuring themselves to congress, or for engaging in a unconstitutional criminal conspiracy, so we can trust that the system of laws we've developed is working as intended and that this will never happen again.
Their justification is that they were federally prohibited from admitting that the surveillance existed. So no, you couldn't sue them because the fed won't admit that the software exists until their pants are around their ankles.
There isn't such a justification. They can refuse to answer questions but they can't proactively lie. And if they were ordered to lie I'm not aware of anything that indemnifies them for securities fraud either.
Fortunately, no intelligence officials faced any consequences whatsoever for perjuring themselves to congress, or for engaging in a unconstitutional criminal conspiracy, so we can trust that the system of laws we've developed is working as intended and that this will never happen again.