See, this is something that I would have assumed would have been brought up in that conference room where this idea was initially pitched... isn't it somebody's job at most companies to ask the "Are we sure this isn't illegal?" question when someone suggests some bullshit that nobody has ever tried before?

Perhaps it was. Some person on HN said something might be illegal. That does not mean the company's legal team came to the same conclusion.

Companies regularly do illegal things. In this case the risk of prosecution is practically non existent so they may get the go ahead even if it's technically illegal.

PS: I wonder if people on HN could contact a prosecutor about this? And if doing so would change anything.

Also the legal team would have probably put a price on it. The C-graders can then know they'll make enough to still pay themselves big bonuses, through the publicity of the court case, etc., and conclude that the personal risk to them is non-existent [go U-S-A!] and so it's worth doing any way.