1) Google wants the most money, so they don't care to let dodgy ads thru.
2) There are more ads going out then can be reviewed, so they would rather have people report them, then they automatically reject the report until enough people report it, then an actual person may review it.
As to why Google doesn't use AI to review them? Google would rather use the AI in a way that makes them more money, than review ads and if AI decides to take them down then that's less money for Google.
(To be clear: I don't work for Google in any way, these are just my guesses)