This entire thing really only makes sense if you take a look at it in terms of court costs. He was being prosecuted on 517 counts, which makes him, in my mind, much more than just a casual media pirate (as suggested by the summary). If the evidence was pretty much equally clear on each of the 517 movies, it probably saved a lot of court time and money to pin all of the substantial penalties on a single count and then suspend the rest of them.
The downside for the court is that a huge amount of publicity it generated because of the "$650,000 for one movie" angle, whereas this might have caused less outrage if it had been a $1250 fine per movie, even if the total had been the same.
If somebody else has another explanation as to why they would choose this bizarrely lopsided penalty, I'd like to hear it.
Okay, scratch all of that. I read the related article, http://torrentfreak.com/largest-ever-bittorrent-tracker-movie-uploader-trial-concludes-131120/
and it says that only a single producer seeked damages. What an asshole, destroying someone's life for the sake of a 25 year old shitty horror movie.