I don’t think he was talking about search results. Rather other Google products like Drive. People used to share Hollywood films on Drive, for example.
Huh, I never have tried this, but I'm pretty sure sharing hollywood films on drive has always violated their Terms of Service, although I could see them not being great at enforcement all the time.
If Drive was that permissive, then upload sites that tended to "look the other way", like Rapidshare, MegaUpload, etc, would never have existed.