As to why the LocalKDC exists? How can you do secure peer-to-peer authentication without relying on some sort of global (and broken) or private PKI infrastructure? SRP wasn't an option at the time.
I am sorry you are upset. Apple is really, really serious about protecting customer data. I encourage the reading of the Apple iOS Security Guide - it describes hardware and software techniques used to protect your data. There is also the 2016 Blackhat presentation by Ivan Krstic that gives more insight into the Secure Enclave.
