Capacity issue may be alleviated by limiting the numbers of users who have access, and then progressively scaling it up, rather than releasing an inferior product (assuming the superior product really exists).
That being said, for all the other points I agree with you.
Google is often a target of any legal claim, so perhaps this makes them more risk-averse too.
Also, it's a meme that when you buy a Google gadget, the customers are its QA team, but it's accurate that they do find ways to sell us products containing their pet technologies so they can gather data and sell them to their real customers - defense, healthcare, manufacturing, etc.
Bard is no different. We'll all be performing the RLHF, and they'll sell off the improvements.
If we passed a law that made it illegal to work for free, companies like Google would be falling over themselves to institute UBI to avoid paying out to their userbases.
That being said, for all the other points I agree with you.
Google is often a target of any legal claim, so perhaps this makes them more risk-averse too.