In the last year or so they've made slight motions towards implementing ~some~ captions, but have done a very bad job of it. Most shows would just have random episodes captioned. So you start a new show, then a few episodes into the season realize you couldn't keep watching them in order because the next few episodes were uncaptioned. To say that this is frustrating, especially for an arc based show like Lost (which was their flagship example of "we are captioning for you!" for the longest time) is an understatement.
This lawsuit is essentially the deaf community having reached a boiling point. These were patient people who tried for the longest time to get Netflix to act like a decent company, and it just didn't happen. It's rather sad that without this lawsuit, they probably never would.