Banning all technology because someone might misuse it is an illogical extreme.

As far as I can tell the ruling is more nuanced. If AI is defaming you, there needs to be a way to correct the record.

A company being open to liability does not mean it is always liable, just that it can be if it really messes up (especially if there are aggravating circumstances, e.g. you need to drag them to court to issue a correction).