There are two fatal flaws in your reasoning:
1. You assume that "the police" and "the criminals" are disjoint sets.
He does no such thing. He is suggesting that, say, Apple would hold a key and would only unlock a device in response to the concurrence of two separate branches of government. In this case the executive and judicial.
2. You assume that innocent people have nothing to hide, and nothing to fear from the police.
He made no such assumption.