Using Google Translate API to create a Translation Dataset Is it a good idea? ;-)
Is it legal to do so? Is it legal to release such a dataset to public?

Say I have a language X for which I want to create a dataset for translation to/from English, for which I have no online sources to scrape out the data from. But our giant Google Translate somehow has the support for language X.

Can we just dump the translations from English datasets for my language X using Google Translate API and create a rough dataset to start with?
It depends. Google Translate works very good with some pairs of languages, and not good on others. Based on my personal experience, translating from North-European languages (Dutch, Danish, Swedish) to English worked almost perfectly, while English-Italian translation lead to bad results.

You can find a Spanish-English dataset here, this is a very official source.

Additionally, it seems DeepL is a great German &lt;-> English online translator around.