He didn't get in trouble because he was flying recklessly, but because he was trying to earn a living.
No. This was specifically because he was being reckless. His videos showing him flying at street level through traffic, buzzing the hospital heliport, etc.
The reason the FAA became aware of his asshattery is that he uses his jerky stunt flying to promote his business (he sells multirotor hardware, among other things). He's an attention whore, and puts together his videos with a deliberately provocative tone, and it caught up with him. The issue of commercial vs. hobby was incidental, and the administrative judge's ruling didn't speak to that directly anyway.
Regardless, this isn't even a "final" ruling. For now, he's had his fine dropped. Heavy, onerous regulations are coming for RC/FPV operators, and it will be ugly (licensing, air worthiness certificates, medical exams, etc).
Why should buzzing a crowd be okay, but buzzing a crowd FOR PROFIT be illegal?
Buzzing a crowd isn't OK either way. Regardless of the state of the FAA's pending new regs, plenty of local laws against reckless endangerment can be brought to bear, and this sort of ruling is going to pour gas on the fire of a thousand local jurisdictions throwing together a patchwork nightmare of laws against Evil Drones. This ruling is actually a bad thing.