The main problem with this ruling is that it assigns the burden of avoiding injury to the wrong party. The party that can avoid injury at the lowest cost is the person using the saw--he or she can simply be careful. It costs nothing more than going a little slower and paying more attention. By contrast, the inclusion of this technology would almost certainly be expensive, raising the price of a table saw significantly, and still would not eliminate the risk of injury (it would apparently result in small gouges rather than severed fingers).
Another problem is that it creates a disincentive for companies to develop these kinds of technologies. Flesh-sensing technology apparently does exist, and could be used on saws, but if failure to include it on all saws creates a large legal liability, then it might no longer be in anyone's interest to put it on any saws. Consider another example: The airbag was invented long before it was ever used in a car. Suppose that, one year after the airbag's invention, one could sue automobile manufacturers for failure to include them after being injured in an accident. This would give manufacturers two perverse incentives: to include airbags before they are fully tested (possibly causing more accidents), or to avoid developing airbags in the first place.
Depending on how the table saw case turns out in the end (I would not be surprised if the damages were reduced on appeal, or if the entire verdict were overturned), there are several possible outcomes that could occur:
1) Manufacturers stop selling inexpensive saws, and sell only high-end saws with flesh-sensing technology.
2) Manufacturers sell low-end and high-end saws with the flesh-sensing technology, resulting in more expensive saws for everyone.
3) Manufacturers continue to sell low-end saws without the flesh-sensing tech, but charge more for them to reflect the higher liability they represent to manufacturers.
Anyway you look at it, the consumers of low-end saws suffer from this decision (except, I suppose, for those who are unwilling to take care to avoid injury, and who would prefer to pay more to get a low-end saw with flesh-sensing technology--surely a very small portion of those who would buy table saws).