He's suing the defendants as individuals even where an LLC exists and was a real entity -- the developers of some of the bitcoin alternatives being sued performed their development work as a business. It may ultimately be that if the case was lost and the plaintiff tried to domesticate their judgement the LLC would successfully act as a shield. But you dun screwed up if that's what ultimately saved you. The advantage of these structures is that they make you less likely to get sued in the first place, since they potentially bound the recovery. -- but that doesn't obviously work against a vexatious litigant whose real goal isn't to win by merit and whos case isn't being funded by an attorney operating on contingency.

What you're suggesting also might be at rather large risk of being ignored by the court as pretext, or esp to the extent that it's not pretext, would be viewed by developers as compromising their independence, which is quite important to them.

There is no shortage of alternative structures that you could imagine putting in place if you knew in advance that this would happen ... but if every time you went to contribute to a piece of open source you needed to first form a non-profit it's pretty clear that there wouldn't be any open source! :)