Because when you are billions-of-dollars profitable, and you go ahead and fire a lot of people, it tanks morale, and good performers start looking for the door. (Note: This does not hold in the middle of a recession. We aren't in the middle of a recession, though.)
Because a company could be just as successful without XY% of its workforce, but nobody can correctly identify which XY%. (This one still holds in the middle of a recession.)
Because a lot of that XY% would be more productive, if they were instructed to do something that's more useful to the bottom line.
But I've seen people just temporarily work really hard and/or get lots of help while they're on a PIP, succeed at it, and then revert to old habits. In a lot of cases rather than go through the trouble to put a report through a PIP, which may not have the desired outcome anyway, the manager will just put them off in a corner and give them unimportant tasks, making it that much easier for them to just coast.
This is a lot of work just to appear "busy"... are you saying they shouldn't be documenting?
It's possible to give the appearance of being busy and valuable if you make every project way more complex than it needs to be by scheduling lots of meetings that end up mostly involving bike shedding, publishing lots of design docs and spreadsheets to gain visibility, submitting mediocre code so that you can subsequently submit lots of cleanup CLs, and so on. The game is easier to play these days because the company is so large that entire teams can go off the radar and not have to be accountable.
This happens at every big company and it isn't the norm at Google, but it happens quite often. It's really hard to fire employees, and a pain for managers. It's way easier to just let them be, and for a low-mid level manager that can even make it easier for them to justify additional headcount, which makes their org bigger and increases their standing.