Re: slippery slope or lawsuit magnet?
It is the job of the law enforcement agencies to approach Google with a warrant, not for Google to approach law enforcement agencies and suggest that they might want to take a warrant out on one of their clients.
But it is not illegal for Google to do so if they tell the client they might do so and the client agrees. When you sign up for gmail, you are agreeing to let them do all sorts of stuff with your data.
If you're a witness to a crime, you are not necessarily required by law to report it, but that doesn't mean it's wrong for you to report it.
I concede that, in this case, the right outcome was achieved - but I worry that this will make it harder for the right outcome to be achieved in the future, and that it could result ...blah blah blah.
Do you have an argument that isn't based on the slippery slope fallacy?
Something along the lines of, maybe, "Google's terms and conditions don't adequately spell out that they'll be scanning your images for child abuse images" or "<insert locality privacy law here> prohibits Google from performing this scanning" would be appropriate, if borne out by the evidence.
I don't have a gmail account, so I can't be arsed to research this, but I think you'll find that Google has. They've been wrong before, though.