> If you intentionally or negligently damage someone’s property they can sue you personally.
Yes, there are also other ways to pierce the corporate veil. In the vast majority of cases, they do not apply or would not be provable. Bringing up exceptions to the rule doesn't mean the rule is misconceived. As most devs know, sites can get fucked up for all sorts of reasons. A client relationship may deteriorate to the point they may think you are negligent. The chances of a court agreeing to pass liability through to you personally on that basis are likely 0. As such, incorporating itself still offers protection.
Just like if a CEO shoots someone while on the clock and tried to say it was a business activity, and got personally indicted, doesn't therefore mean incorporation was a waste of time. Essentially the theory behind piercing the veil is that some aspect of the alleged conduct was not a legitimate business activity. Such as fraud.
> Nuisance lawsuits aren’t much of an issue because insurance covers the legal defense and indemnifies you.
There is that too. Although if you are running a small software business this step is often not worth it.
Yes, anyone can make outlandish claims. It doesn't mean incorporation as a personal liability shield is not highly valuable and well established.