You missed the most important part of that case. It wasn't that the coffee was at X temperature or that McDonald's had been warned before, it was that the McDonald's corporation showed disdain (not just disinterest) for the woman and her injuries.
Read the transcripts. McDonald's completely and utterly blew her off. This attitude from the corporation towards a private citizen is what prompted the judge to level such a large fiscal punishment.
I'm not 100% sure, but I believe the judge actually awarded the plaintiff more than she was asking for. And I say good for him!
Are you talking about the pre-trial mediation? If so, that's how things work and I'm not sure what your point is. If you do not settle it in mediation, you go to trial...
As for the "judge dropping the hammer" ... this was a jury verdict. The jury awarded the damages, both actual and punitive. The judge reduced the damages substantially. In fact, federal judges CANNOT increase the damages that the jury awards.
So.. stop trying to Bill O'Reilly me.