Trials are never a sure thing, especially when the other side has deeper pockets, and especially when the laws at issue are so messed up.
Hotz gets out of this with his fame and bank account intact, his hack is already out there, and Sony's still defending against a class-action lawsuit that has the potential to restore OtherOS functionality for everybody else and force Sony to pay damages. The only limitation on Hotz is that he can't do it again to the same company, but he probably won't need to since he's already got root for his PS3.
This settlement is a cease-fire that neither side will want to violate, and Sony didn't get any of what they wanted. (They didn't even make an example of Hotz to scare off other hackers!) It's definitely a win for Hotz, and it's not a loss for the rest of us.
The RIAA at least demands money (albeit only a few thousand dollars). If the agreement here is as the announcement seems to suggest (injunction only), it'd be as if the RIAA settled for just an injunction directing the person not to pirate their songs in the future, with no exchange of money. Most RIAA suit targets would probably take that settlement offer without complaint, and it wouldn't have much deterrent effect.
What part of it, exactly?