I'm sure the Judge's decision is based on the fact that the defendant does not have to reveal the key to the authorities to decrypt the hard drive. She merely has to type it in and decrypt it. The password itself never has to be revealed, she could type it in while nobody is watching. The prosecution is gambling that the computer holds information that will secure a conviction by secondary means.But what if the key is stored solely in the defendant's memory? You can't force someone to reveal knowledge that would incriminate themselves.
None of this explains why the Judge is trying to subvert the Constitution, though.
--Patrick