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As someone said, it's user filtered. Copyrighted movies/music, online - aren't illegal in every country and rights are often granted online. Making it very hard to filter out or know what you need to filter out, without the users telling. And clearly, the users report porn more than non-adult copyrighted material.
A wife/mom, is surfing youtube and comes across porn, they will report it. They will call the governor and the feds, followed by burn in hell Christian emails to Google. They probably won't respond the same way when they find the next Jane Fonda work out tape ripped onto youtube.
Google's lawyers are pretty damn good, lots of ways to twist out of this one.
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