If someone is appearing to be reckless with their aircraft, regardless of the type, it needs to be addressed.
Then address it under the laws about being reckless with a model aircraft, or being reckless with any other type of potential weapon - which is something the police would deal with (and I think have in past cases, e.g. where RC helicopter killed someone in NY).
The FAA tried to prosecute the guy for not having a licence, because (they claimed) it was a commercial flight. This would have massive implications for model a/c flyers who would all require pilots licences. It was a huge attempted land-grab (or simply laziness on the part of the prosecutor not wanting to collect the evidence to charge him with assault or whatever, so we'll just nail him with this licence thing) and the judge saw through it.
It's like a parent on the school run (allegedly) runs a few red lights and drives on the sidewalk, so the city decides to prosecute them for not having a taxi licence because they were giving a lift to another child.
"but if we accept this, it means that every parent who ever gives a lift to another child would need a taxi licence"
"no, that's not the point - the city has a responsibility for taxi safety, if this parent was reckless with their car, regardless of type, it needs to be addressed"
It is the point - address the recklessness, not the lack of a licence that was never needed in the first place (and a licence which, as far as I can see the FAA doesn't actually issue, yet - only experimental/non-commercial approvals - in other words they were prosecuting him for not having a licence that he couldn't possibly get).
Also, the FAA claim that the original guidance for model aircraft (ac91-57) excludes commercial use - love to see someone quote where it does, as the word "commercial" does not appear in it, at all. They are probably trying to argue that being a "model aircraft" necessarily means being non-commercial but that is ridiculous as it would always have been possible to e.g. hire/rent a model aircraft for money, which would be a commercial. Even a model shop demoing an RC a/c for sale would be commercial.