It is more fiscally responsible, Berkeley's copies are behind a paywall (the YouTube copies are being taken down), they have lost nothing. It will be captioned as and when their students need it using the tuition money paid to Berkeley. Sanity is not what I call using free course materials to teach a class and rather than add the missing captions instead sue the university providing the original material, I'd call that laziness (you didn't have to come up with the actual course material, at least you can caption it or pay to have it captioned, crowdfunding would be a wonderful model for this as everyone benefits).
From the actual DoJ filing "Stacy Nowak, a member of NAD, is a professor and PhD student at Gallaudet University and she is deaf. Ms. Nowak would like to avail herself of what she believes is the increasingly frequent use of video and audio-based scholarship. Ms. Nowak teaches communication courses at Galludet, including Introduction to Communication and Nonverbal Communication. She would like to use numerous online resources related to communication in her classes, including the UC BerkeleyX course, “Journalism for Social Change,” but cannot because they are inaccessible. If UC Berkeley’s online content were accessible, she would take courses and utilize the online content in her lectures. "
Should California students / tax payers pay the cost of captioning for a university in DC? If it costs little to nothing to put on youtube in its original form and lots of people can benefit that seems like a pretty moral / easy decision to make which Berkeley did by putting the videos on YouTube. Who is going to pay not only to get the missing captions added but the lawyer fees to have it checked against whatever other crazy law that exists? Leaving it up risks another lawsuit, hence taking down the videos from youtube is their best move here.
Sanity would be either a Judge or legislative branch recognizing this is a misapplication of this law and pushing to get it updated (as far as I can tell this did not reach a court house). Take this not even to its logical conclusion but the literal next step, the DoJ filing lists edX and iTunes U. If those organizations are even remotely fiscally responsible (Apple has allot of money which will attract frivolous lawsuits), the appropriate response is to immediately disable public access to any courses that are missing captioning until captions can be added (whenever that happens). Leaving the content online is begging for a lawsuit with some pretty strong precedent in place.