It's not an issue of being sued. The DMCA protects us, and always has. It's an issue of culture - people want to be 'respectable'. They don't have the mental toughness to stay the course; they're traumatized by bad PR.
Consider the Seigenthaler incident: the moment the bad PR started piling up, Jimbo rolled over and instantly banned anonymous page creation. Did this stop bad pages from being created? No. Did this harm the community? Yes. Was it done without consultation? Yes. Has it proven utterly useless and likely wouldn't've stopped the original page from being created? Yes. Did it destroy a valuable source of information for New Page patrollers? Yes.
Yet, it allowed Jimbo to face the press and bleat that Something Has Been Done. Flagged revs is much the same.
I agree. As a Wikipedia admin since 2004, I'm upset by the increasing hesitance of long-term editors to allow anonymous IPs to explore and edit. One wonders if they can even remember when they were a green anonymous IP editor, adding content or fixing typos, before being wholly sucked into the wiki-world.
I too wish that Jimbo were more stubborn in sticking to his principles of openness. But openness seems to be giving way to consensus. And the admins on IRC seem to have his ear on vandal fighting.
However, if flagged revisions are meant only to replace protected and semi-protected article status, then I think it's a good move. Because it allows people to edit and hash things out, even if the changes aren't immediately shown to the public. This is better than simply locking all users out. One hopes that we can curb the proliferation of flagged revisions, but I'm not sure one will be able to stop its expansion to nearly everything in Category:Living people.
Consider the Seigenthaler incident: the moment the bad PR started piling up, Jimbo rolled over and instantly banned anonymous page creation. Did this stop bad pages from being created? No. Did this harm the community? Yes. Was it done without consultation? Yes. Has it proven utterly useless and likely wouldn't've stopped the original page from being created? Yes. Did it destroy a valuable source of information for New Page patrollers? Yes.
Yet, it allowed Jimbo to face the press and bleat that Something Has Been Done. Flagged revs is much the same.