Sure, rising costs of development is one part of the puzzle. But I'm sure that each and every developer has a budget set aside just for lawyers and as cases like this mount, that budget will only increase. Who bears the cost of said increases, the end users. You can argue that it only cuts into the profits of the developer and on the surface, that's the immediate result. But it's naive to think that they are going to just laugh and write off the millions they lost due to this. It may not be made up on GTA IV, but it will be made up elsewhere. That elsewhere can only come from the end users, either in the form of increased prices directly or future product developed with a smaller budget. How can I be sure of this? Because the only way they make money is by selling product to gamers. That's the bottom line.
There is always a cost. Money doesn't just fall from the sky. I do agree with you that this is just another example of people whining until they get what they feel entitled to (re, the pussification of America). The whole lawsuit was pointless and a waste of resources as people that didn't like the content could just ignore it. Hell, they had to be an active participant utilizing illegal methods to even get to the content. But the costs of the defense as well as the costs of the settlement will eventually make it down to the end user. The more people that jump on the bandwagon, the more it costs everybody else.