So, it sounds like you're saying a fundamental use case is "sending illegal pictures", which seems like it will eventually result in a devastating lawsuit / prosecution.
That's not at all what he's saying. He said that teens user SnapChat to send photos that aren't super important or need to be shared in the future.
Er, "not the core feature" seems clear enough.
He didn't say that at all
That might happen if their privacy/security systems fail and everybody's dick pics are exposed. They don't store data and probably actively purge it, but they might be eavesdropped.
That's almost certainly already happening, though.