[rbarooah]

Clearly you haven't thought this through.

Security is sometimes a trade-off but in this case there is no trade-off involved. Google can just as easily block the malware without the potentially defamatory language.

The accuracy of the algorithm is utterly irrelevant.

[analog]

Rubbish. The trade-off in this case is that a more mealy-mouthed warning would lead to more people clicking through.

[rbarooah]

Nobody except you is suggesting a mealy-mouthed warning - that's a straw-man.

An accurate and informative statement like:

"Google's Scans detected malware <X>, which is known to do harm <Y> within the past <N> hours at <Z> percent of the pages operated by <COMPANY>. Google recommends that you do not click on this link until this warning is lifted. [Site owners click here for detailed information]"

...would be just as effective.

Scare tactics, especially those that might be laying blame incorrectly, simply breed ignorance, and ignorance is the enemy of security.