There are three different approaches to evaluating whether or not Plurk should go ahead with a lawsuit.
There's the ethical approach: is this a matter which, ethically, is worth pursuing? In this case, we might answer by examining the nature and amount of harm done, and the intentions of the parties involved. The harm was limited by unusually quick action, and by the fact that it occurred in a market in which Plurk had no influence or prospective customers to begin with. Microsoft has given a plausible statement denying any intention on its part. Comments suggesting that a lawsuit should be pursued simply because that's the action expected from Microsoft in the case of a role reversal belie a prejudice against Microsoft which doesn't provide a strong ethical basis for a lawsuit.
There's the approach from law: Plurk must demonstrate which laws were violated, in which country, and to what extent. Has Plurk taken any actions to protect its intellectual property prior to this case? Does it hold any patents? Has it copyrighted its publicly readable code or released it under a license? And, if indeed there is a law which has been violated, to what extent would the damages be assessed? If Plurk can't point to some clear loss of revenue from the event, then they must establish an intrinsic value for their intellectual property. From a legal standpoint, that can be difficult.
Finally, there's the approach from likely outcome: statements like, "And no mater how expert or well paid their lawyers are it won't change the fact that they are in the wrong here" belie an extreme naivete in terms of the law and legal proceedings. Legal battles between companies are less often resolved by establishing the "rightness" and "wrongness" of the parties; more often, they are resolved in terms of resources: the company with the most resources wins.
"Hackers" have a peculiar tendency to believe that their expertise in generalized systems means that they can dive into a legal battle and understand the arena well enough to have an outcome in their favor. The term "IANAL" is almost always followed by a layman's legal advice. However, legal proceedings have little to do with programming. Microsoft's legal team for example could simply choose to bury Plurk in onerous discovery, and it would cost Plurk far too much money to even enter the courtroom, while costing Microsoft relatively nothing.
I don't see a winning scenario for Plurk from any of those standpoints.