Just like all other similar decisions made by other companies under the guise of 'protect[ing] the customers', it should be clear that this is no more than a guise. If protection is what they had in mind they'd simply disable any functionality which could be impacted by a dodgy part. Disabling the whole device has the single, self-serving purpose of channelling the cash flow from the repair businesses into Apple's coffers.
It sounds plausible, but none of us can know for sure as we don't have the source code and internal access at Apple. (maybe they can't just deactivate TouchID on its own, maybe they can but they want to protect the already existing fingerprint data on the device)
I don't see how killing the entire 3rd party repair network worldwide can create a positive outcome for Apple, because they are unlikely to even have the resources for repairing every device in a timely manner and with acceptable costs.
It's easy to say that they'll just earn more from repairs and sell more devices, but customer satisfaction is also important and I believe Apple takes issues that essentially brick devices very seriously.
It is also well known that they take privacy very seriously (although implementations might not be perfect), so I am inclined to believe that in this case privacy concerns have won against customer satisfaction concerns.
Edit: Apple Pay is also a _very_ important product for Apple, I imagine they simply cannot afford any issues that might make this seem unsafe to customers.
> I don't see how killing the entire 3rd party repair network worldwide can create a positive outcome for Apple, because they are unlikely to even have the resources for repairing every device in a timely manner and with acceptable costs.
Limiting the availability of repair services to the captive audience of apple-users probably increases sales. Those who have bought into the apple world are (for now) unlikely to step outside of the garden, so they'll replace their broken iThingy with a new one instead of 'just getting an Android this time'. Just look at this comment for an example of that attitude: https://news.ycombinator.com/item?id=11061800
> "... I've got better things to do with my time. I'd rather walk into the Apple store and replace my MBA or my iPhone when I've got a problem. That saves me time for my wife or my hobbies. Trade money for things that save you time, to spend that time on what's important to you (if you've got the money). ..."
This is the attitude apple would like to cultivate: solve problems by throwing more money at them.
Just like all other similar decisions made by other companies under the guise of 'protect[ing] the customers', it should be clear that this is no more than a guise. If protection is what they had in mind they'd simply disable any functionality which could be impacted by a dodgy part. Disabling the whole device has the single, self-serving purpose of channelling the cash flow from the repair businesses into Apple's coffers.