Presumably you would know who you're video calling anyhow prior to calling them, so there's not really a meaningful privacy violation...
The only case I can think of is you calling me to expose yourself or something - to that, I'd say that a privacy option where you can make it so you have to add someone before they can video call you would suffice.
One of the problems with an opt-out setting is that it can become a viable attack vector whenever the application settings reset: "OMG New phone for my 14th birthday" will look like an invitation to some segment of the population.
http://support.google.com/duo/answer/6376115
Google knows about dick pics.
And limiting it to contacts doesn't solve the problem.
Why should my phone be displaying something chosen by someone else unless I explicitly opted to engage with them (in this case by answering a video call)?
Plus, even if I did have contacts with a dick pic sense of humor, I'd much rather see a dick from them after I opt in to the call (so that I make sure I'm in an appropriate setting). Getting one randomly is insane.
Imagine if your husband or wife called you for some phone sex (say you are on a long trip) but you happen to be in the elevator with strangers on the way to your room. Brrring! No thanks.
Seems like the sort of thing that perverts would take advantage of.