Reading TFA, it states "The 1st Circuit said a new judge assigned to the case could reduce the award again, but the record labels would then be entitled to a new trial."
A new trial, even if only for damages, is the last thing the record labels should want. Each new trial increases the odds that some jury will award a token amount in effect removing effective civil sanction. Given that Jammie Thomas-Rasset had her penalty reduced to $54,000, it is likely even a new judge will reduce the penalty to well below $80,000. That's not an amount that will destroy someone like Joel Tenenbaum's life, especially since he's now a public figure and comes from what appears to be a relatively well-off family. At worst the penalty will be reduced to $70,000 and the RIAA will simply have to take that amount versus going to a new trial.
Considering that Joel Tenenbaum has now achieved some notoriety with this case, it is simply a matter of monetizing one's 15 minutes of fame. I don't think he will come close to monetizing it to $1 million, but I also suspect he won't have much of a problem monetizing his fame to basically feel no pain at all from the penalty. Note that in this worst-case scenario Tenenbaum pays the fine but has no other obligation, versus a settlement where the RIAA could demand he goes away forever and never speak in public of his experiences again. Writing a book, giving talks against the RIAA, all of these would remain open to him.
One may object that maybe Tenenbaum is not in this to monetize fame, but from my experience, the last thing serious research scientists at the beginning of their careers want is unrelated distractions. There are papers to publish, conferences to attend, jobs to apply for, etc. He must be getting something from this trial even at risk of this penalty to make the time spent well worth his while.