OP that I was replying to was specifically talking about the feasibility of manually checking the 120k account bans, so I'm not off by an order of magnitude. I'm not suggesting all automatic checks are replaced with manual checks anyway, in fact the suggestion was a manual system for appeals, which would be much lower than the total number flagged.
I think your message pretty much gets to the same place though:
* Could Google do manual checks for appeals? Yes - absolutely. Even if it costs them $30 million to review, this is still tiny in the scheme of things (c0.01% of app store revenue). Never mind the fact that these developers had to pay to be on the platform in the first place.
* Would it be best for Developers if Google did it? Yes, it would give developers a chance to appeal and lower the number of absolute horror stories we hear.
* Does Google want to do it? No, because Google only cares about profit and doing the minimum it can get away with.