I was a corporate manager for McDonald's back in the 70's. In can actually speak informatively on this subject. (Ray Kroc even bought me a drink once)
The reason for the higher temperature was two-fold.
First, to extract more from the coffee ,and thus reduce the amount of coffee required to make a pot.....and thus save money.
The other reason was to keep it hot longer, and decrease the complaints of cold coffee. They found that the average person drinks the coffee ten minutes after buying it.
The coffee guild's recommended temperature to serve coffee at is 155-175F. McDonald's''s brewed at 185-190F, and served its coffee at 180-185F. Most commercial sellers brew at 165F and serve at 160F.
The reason for this was economical and not nefarious. However, the company had indeed been told by the courts before that the coffee was dangerously hot. Since they knew of the situation, the judgment and award went from compensatory to punitive. The real winners were the attorneys on both sides.
Now, as far as the claims that McDonald's coffee is "twice as Hot" as everybody else's coffee, or that the woman was, "Injured for Life", and that the award was "Hundreds of millions",....they are as false as the Claims about Obama's birth. Just because some people repeat what they read or heard won't make it so. McD's coffee wasn't 320F, Though severely burned - the woman healed up, the total award was 2.76 million, ....and Obama is from Hawaii....and I am sure there are those reading this post who will want to debate some of this...which should be posted in a new thread in the political arena.
As far as the taste of McD's coffee back then (I don't know about recent surveys), it was rated as one of the most popular because of the higher coffee flavor. That was long before the baristas existed. McDonald's already had a warning on the cups, but now has a larger warning. They still serve their coffee at 175-195F....and have had no recent suits. Many, still say they prefer the coffee at McD's because it is hot.
The real kicker was that the company refused the original request for $20,000 to cover the medical bills. Then lawyers entered the scene, and the offer was $500,000, which McDonald's turned down again. At trial, the jury awarded her $200,000, and assigned her 20% fault, thus reducing her award to $160,000. They awarded $2.6M in punitive damages, mainly because McDonald's had been so resistive to admitting fault.
You are correct that the company really doesn't absorb the cost of settlements.... and that the consumer ultimately pays the cost.