The one thing you can do is to put the key in a separate hardware device, and have the hardware refuse to make the key directly available, but only do encryption or decryption operations under certain circumstances (e.g. it's audited what's running on the device). This is definitely doable with a TPM on a standard PC, and there are in fact open-source libraries that will handle this for you.
Or better yet, if you have full blown root, what's preventing you from just kinda LD_PRELOAD some code for that process and steal the decrypted data before it gets to the legitimate application? Or take a screenshot.
So I think the point is that Google probably will not allow this to be ran on any ROM that's not signed by some key.