There probably was risk discussion involved in some point of feature implementation. Lawyers got involved and the discussion likely went like this
1) DMCA Safe Harbor gives us, Google, unlimited protection
2) What are the users going to do any case? Sue us? Migrate to Microsoft Office 365? The minuscule amount of issues caused on 0.1% users is not going to hit our bottom line and the users cannot damage us.
3) We offer key account manager services for organizations large enough that could cause stir (Spotify size)