"They have suggested that the safeguards of iOS 7 were good enough and that we should simply go back to the security standards of 2013." This is interesting. Perhaps instead of requesting a custom version of iOS with specific vulnerabilities, the FBI should simply request a signed version of iOS 7.0. They could use existing vulnerabilities to gain access to the phone, without placing an undue burden on Apple.
No. Among other things, the order the FBI sought requires Apple to build a RAM only version of iOS.
Anything that requires reflashing the phone, or that writes log files at boot or alters as much as a single bit on the phone is a no-go from an evidentiary standpoint.
Edit: but anyway, iOS 7 has no understanding of the encrypted format introduced in iOS 8
I'm pretty sure the many on-device storage formats have changed as new features are introduced. I'm pretty the Notes app in iOS 7 doesn't have the capability of inserting doodles or checklists for example. And the Messages app doesn't support groups with names.
FBI doesn't just want an unlocked phone, they want an unlocked phone with data intact, so Apple still needs to write and test a lot of code that performs reverse database migrations, possibly losing information in the process.
If systems can be technically downgraded without losing data, just making it inaccessible, then they can downgrade, crack the code, then upgrade.
I don't know enough to know whether this works. I suspect apps that didn't exist in iOS 7 would have their data deleted, although perhaps this wouldn't happen if it wasn't unlocked (and it would be power-cut as soon as it was cracked).
Presumably any request from the FBI for new software includes the fact that the new release has been signed. What good would an unsigned software release do for the FBI? The resources to create that signature likely exceed the ones to jump past the code that does an erase after too many attempts.
The signed software with bad behavior is precisely what Apple is afraid to unleash upon the world. Some FBI agents have recently shown themselves to be extremely untrustworthy with valuable items [1].