It's not just this particular company. By leaning on the dev to change his name it sends a message to other devs who might go much farther than the dev in question.
And as far as the "bullying" goes? I just don't buy it. When you go into business you enter in a world of competition, limited resources, and a field of competitors that knows more about the business, laws, and regulatory requirements than you do. Are they supposed to not be able to compete with you effectively through price wars? Are they not allowed to use their influence to get better deals with suppliers than you, as a sole business owner, can get? Are they not allowed to offer exorbitant salaries to potential employees to gather the top talent? Are these tactics bullying? To others, maybe. Not to me. If I had to make the decision if I was inXile, I would do it. Yeah, send them a C&D. F' him. He decided not to do it himself, so I'll try and force him to. If the community balks, probably try and minimize it and leave other devs alone, and hope this one is a deterrent. If the community doesn't care as a whole, then keep doing it as long as I feel it is truly necessary.
When you run a business your success is not just profits. It affects the ability to engage in other projects, to hire more people, to pay employees well, etc. etc. As long as it's within the law, I say it's fair game to at least do it. If it's an ethical gray area, proceed with caution, but it does not automatically mean do nothing. And in my opinion, they are well within their rights, and IMO well within ethical standards. So yah, it doesn't really bother me.