The fundamental question is whether a federal court can require a private company to do new work, to assist a federal investigation.
The answer now is no. Companies must provide access to information if they possess it, but that's not the same as writing new software to enable access to information they don't possess.
Once that Rubicon has been crossed, it is unclear what the legal test would be to limit the work that can be requested. If a court can require Apple to write some piece of software, why couldn't it require Apple to write some other piece of software? Or take any other affirmative action that might assist the FBI?
I know this might sound crazy but this is how common law works. Court decisions create precedents, which are often in the form of heuristics for constraining future decisions.
A very famous example is the Supreme Court precedent on abortion: before a fetus is viable, the government does not have a legal basis for considering it to have independent rights. Whether or not one agrees with it, the rule is clear.
Right now the rule is clear for what companies must do under court order. If the FBI succeeds in applying the All Writs Act in this case, that clear rule will be gone. What will take its place?
Edit to add a concrete example:
Apple announces that iOS 10 cannot be broken even by Apple. The FBI goes to court and says that they are tracking known terrorists who are using iPhones. If those terrorists get iOS 10 as announced, the FBI will be impeded. So Apple must alter iOS 10 to ensure that they can deliver retroactive access to phone contents in some way.
This would be the smartphone equivalent to CALEA, which requires network operators to build their networks in a way that permits wiretapping. The big difference is that CALEA was passed by Congress, whereas the FBI would only need a court order for smartphones!