Punitive damages are not for pain and suffering, they are meant as a punishment to the corporation to act as a deterrent to further illegal or malicious behavior.

If you saved millions by cutting corners in production to make cheap but sometimes defective products, are you going to be scared off that by $200 replacement of parts lawsuits? If you think $50,000 is nothing to Microsoft, imagine what $200 is.

That being said, this is in particular is pretty silly. Why would you be moving your console around while the disk is still in it?