They'd rather defend a lawsuit and pay a settlement than preemptively replace all defective products as they come in. Companies make this sort of decision all the time--trading off users for the bottom line. There's nothing evil about it (no point in doing more than what the law requires of you), but if your policy is to do what you can get away with under the law, you should expect litigation over whether you've crossed the line in any given case.
There's nothing evil about it (no point in doing more than what the law requires of you)
I think reasonable people could debate both of those points. Making either ethical judgements or PR/branding decisions based only on the minimal standards required of you by law is always a dangerous path to tread.
This is only partly for the reason you give, that some people will sue you now. It's also partly because of the other consequences. Some people may sue you later and with more success, possibly after the rules of the game have been changed by subsequent legislation or precedents. Worse, some people may not bother suing you at all and may simply vote with their wallet and/or encourage others to do so, and that is an attack against which a business is given little opportunity to defend itself.
