I think part of the reason might be that the browser settings aren't as reliable as location data. A lot of people even outside the US, have their browser/OS set to en-US from the default configuration. Even if they might be located in France or India. If Google had determined that was the case more than 50% of the time, then I can see why they favour using location for language instead of browser settings.
I added Accept-Language to our web logs for a month before we added our first site translation.
That showed us that the majority of people had a language matching the expectation we would have from an IP geolocation, so we use Accept-Language alone.
That hasn't been my experience both from running a site in Europe using the accept language header as default and from my anecdotal experience with friends in Asia and Europe.
In general, I think using geoip is much more likely to get things wrong than using the accept language.
I wonder if they could just change the browser to hint about "Do you want content in your local language?". I wonder if the dominant browser vendor on the web would be willing to accommodate Google...
So if that's the case then give them the en-US version? They'll either accept it because that's what they've explicitly requested, or change their system settings to match what they actually want.
