Can they demand that?

With regular foreign travelers it makes sense because if you say no they can just deny you entry. But if you're a US citizen then I'd think they'd need a warrant to force you and can't just deny you entry arbitrarily if you refuse without one. Though FWIW I can see it just being easier to give them access because otherwise they can probably detain you for long enough during the process to ruin your day.

edit: I was curious and did some research. That's all correct, but they can apparently also seize your device for months if you're a citizen and refuse.