A notorious cheapskate like Google is not going to pay to put hardware crypto modules in huge number of servers. Those things are expensive, power hungry, unreliable, instantly obsolete, full of bugs, often associated with binary drivers or HALs, and barely or not at all faster than CPU cryptography. I've never seen a case where a real server with a real CPU could benefit from hardware crypto.
Any modern CPU has dedicated hardware for encryption. And a huge number of storage devices have it too - either storage arrays (which perhaps Google aren't using) or standard hard disks, especially SSDs.