IIRC it was mostly from groups like Getty images. They and other image licensing companies didn't want google showing their images in search results. They claimed it was copyright infringement and given the absolute state of IP law in the US they could have made Google's life very difficult.
We're talking about reverse search, right? (Because "normal" image search still kind of works, it's reverse search that is completely broken.) In this case, you already have the copyrighted image, and if you find out that the same image is on Getty Images, then all the better as you can check it license. Also, it's better for GI as it gives them more exposure, and the kind of companies who use GI are very unlikely to pirate images.
