Security is not the only issue
QEMU has other issues which used to get in the way of building large and scalable cloud. They had quite a few serialization points in IO as well as extra copies, mallocs "under duress" and other things you do not really want if you want to squeeze every possible CPU cycle out of the machine. There are also quite a few places where Linux has come up with considerably faster modern library calls, but QEMU still uses the POSIX ones in the name of cross-platform compatibility.
By the way, I thought Google cloud is predominantly containers. Where does kvm come to this?