Edit: meaning improved protections against baseless lawsuits that could be damaging regardless of their merit. The simple way to protect your news company from being sued for releasing leaked sex tapes is to simply not release leaked sex tapes, which I think will be the major takeaway from this case.
These huge sums are required to set an example and not just be a fine. If he only won $500,000, then then next time a similar situation arises it just becomes a math question. Can they can earn more than $500,000 by releasing and paying the "fine".
A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one.
Punitive Damages are intended to prevent X from becoming too small.