It IS that easy, the trouble is finding the niches that are profitable that other people haven't already found. Getting in late to the game limits your choices to either 1) Being MUCH better at SEO than the more established people working the same strategy, 2) Finding a new niche that has somehow been overlooked by all the other people doing the same thing you are or 3) Finding less profitable niches in which to fill the need and game.

The reason that everybody isn't doing it is many-part, but the highlights are that SEO isn't that easy for the lay-person, and it actually does take quite a bit of work and commitment. There is a very big initial workload to setting up a site to generate passive income, and like a fire, it needs constant stoking to maintain, and will start by making VERY small amounts of money at a time (My first attempt grossed an average of $12 per month).

Simply put, the 'easiest' way to make money isn't really all that easy... and as for 'lowest risk', I'd completely dispute that too. If Google changes an algorhythm, or categorizes you as spam, or you're linked to by an unsavory site, then that could all go away. If you're hosting 50 sites on the same IP address, and have actually managed to get them to profitability, and Google bans the IP, now what?