Badspot created Step 1: Games to protect his personal assets (IE. His home, car, etc) from being in danger should a company wish to sue him.
If they found that his game were in violation of a law (such as a violation of copyright law) then the maximum amount that he could lose would be whatever the company itself owns...in this case likely very little.
Essentially it is a widely, and understandably, used legal loophole to insure that you aren't taking on too much risk in starting a business in lawsuit-happy America.
If I remember correctly, LEGO approached him a long time ago about a position at the company, but ultimately they failed to contact him after a meeting. I guess they weren't interested.