It's bad law because, in the end, Apple had nothing to do with the accident. He could have just as easily been eating a Subway sandwich. Should Subway have been liable because the guy was a douche and their Sandwich bag lacked a mechanism to prevent him from eating it while driving?
To put it a more relevant way: car manufacturers have the technology to prevent rear-end crashes. Some production vehicles actually implement this (Infiniti has that system if memory serves). Automatic braking. This guy's car obviously didn't have it; the kid would still be alive if it did. Should they be able to sue the car manufacturer for leaving out a safety feature that the law doesn't mandate?
The law does not currently mandate that cell phone manufacturers prevent the use of cell phones while driving.
Now, if there was a legal mandate and Apple left it out, then that's a different thing, but that's not the situation. Apple broke no laws. Apple wasn't aware of the situation. It's well known by now that you shouldn't use a phone while driving, and they're not responsible for educating drivers on that fact. Nor are they responsible for dictating what their customers may or may not due with their technology.
Drivers are held solely accountable for the responsible operation of their vehicles. Apple was not operating the vehicle in any way, shape, or form. Sandwich or iPhone running facetime, the guy was being an idiot and should have known better. There is no excuse.
If this case succeeds, it paves the way for manufacturers to be sued for just about anything that goes wrong. This is not a sane thing. You may think it's okay because "Apple had the technology and should have implemented it," but you're not thinking about the precedent this would set.
We're talking about a body of resulting case law that would end up requiring manufacturers of ALL products to predict every possible misuse of their products, and actively prevent them, or end up the victims of every ambulance-chasing lawyer in the country (more than they already are). The patent is a red herring; well known technology exists to do lots of things, and the fact that it's patented is irrelevant. The manufacturers know about these technologies.
Forcing them to be responsible for their customer's sanity in such a situation is an unrealistic goal unless you want to destroy every hardware business in the United States.
Apple was not at fault. The driver was. The driver should be nailed to the wall for it, and passing blame won't help with that.