One difference: if he uses his (still-secret) password to decrypt a copy of the material in question, the action only affects the material in question.
Whereas if he provides his password, he has effectively lost his privacy on ALL his so-encrypted data, whether it applies to this case or not. A much larger loss.
I use PGP/GPG for encryption of my private data, and while I would fight tooth and nail against relinquishing my passphrase, I would consider agreeing to decrypt selected content in a court case. Depends...
And of course, in any event, the minute I could do so, I would change the old passphrase associated with my private key to something else.
Well, since they want the entire volume decrypted, they will still have access to all of his other private data. The drive is in the possession of the prosecutor, and he would have to decrupt the volume under supervision. Since he encrypted a container, he can't decrypt specific files only (and they want to search the other files for additional illegal material).
At any rate; if put in that position by the authorities I guess you would have to weigh the penalties of refusing to decrypt vs. the potential penalties or other consequences of giving them what they want. Prison gives you three hots, a cot, full coverage health care, dental, cable TV, library, workout equipment ... ie. it's outfitted a lot better than my place. ;^)