http://seasteading.org/seastead.org/new_pages/dynamic_geogra...
Basically, he postulates that the reason current governments suck is that there is a high barrier of entry into the industry and a high cost for consumers to switch providers. But a ruler of an archipelago of seasteads who passed an unpopular law might wake up to find all the residents have moved their platforms. Seasteading puts competitive pressure on the government industry and provides incentives to govern wisely.
Also see Patri's Econ Talk podcast:
http://www.econtalk.org/archives/2008/10/patri_friedman.html
http://seasteading.org/book_beta/Alternative%20Strategies.ht...
Actually their plans are very well thought out. (And apparently you didn't read them before you decided to critique.)
Basing a platform on the principle of a Spar Buoy gives them immunity to just about any rogue wave or tidal wave nature, given enough clearance. Their larger designs could ride those out, while most buildings on an island would be toast.
Also, nature's not making new sovereign islands at a particularly useful rate.
Unfortunately, Tonga claimed the island and kicked them out.
Generally, some nation will come and take it from you. Wolf Hilbertz developed an technique to electrically accrete limestone out of sea water and was using it to build a micronation, but it was almost certain that it would be seized by Mauritius when it broke surface.
http://en.wikipedia.org/wiki/Saya_de_Malha_Bank#Artificial_i...