I am not saying it is right, but to a large degree this is the cost that some of us 'pay' for millions having 'free' Gmail/GDrive etc. Fully automated processes that close accounts, no due process to get them timely reinstated when the machine made an error. You are correct, if they admit a mistake here, it will open the doors to lots of claims. I sometimes think they could a lot of people to pay for the service (with $ not just having their digital lives being harvested) if they knew to be treated better when something like this happens.

The question everyone needs to ask themselves, if Google closed your account right now, for good - what would that do to your life...

7000$ is a pitance. Maybe this case is simple, but many will not be. Say they raid a house and confiscate a hard drive. Encrypted or not, that is going to be a huge thing. Arguments will be made about whether anything incriminating was stored on that drive. Just google the cost of a forensic expert witness. Both sides will need one.

Such costs are actually why so many police agencies are backing off of CP investigations. They still prosecute where evidence is clear, such as when someone emails such material openly, but they arent willing to invest the tens and hundreds of thousands of dollars necessary to handle the complex cases involving encrypted communication/storage. 7000$ would be a bare minimum for only the simplest of legal defenses in the simplest of cases.