Can google remote wipe/delete phones without your okay?

So I'm pretty sure you all heard about the ice cream sandwhich leak right?
http://www.androidpit.com/en/android/blog/398418/Video-A-Two-Minute-Peek-at-Ice-Cream-Sandwich

So I was just reading up on it on some other blog and people were claiming that the kid got his phone wiped remotly by Google? Is that possible or legal? If they did that to a phone I got legally I'D be pissed!