Having a legal entity makes sense & is fine by itself. I think the issue was more about what formalizing would mean for the team and workflow, because then (depending on what country we do it through) you have to have trustees / board members, a constitution and bylaws, annual reports, sometimes tax forms, etc., and generally team members consider themselves fans just like anybody else and weren't all that hyped about formalizing. (I'm not particularly worried about being sued over the assets and that side of it, because it probably would have already happened by now if it ever would.)
I think at the root of most issues is that we're a really small team that does this in our free time as a labor of love. We could be more ambitious if we had more people that we could trust (i.e,. have been a constructive part of the scene for a long time & has the time & initiative to do the work) and that could do everything that needs to be done in the way it needs to be done. The chicken-egg problem there is that we could do better promotion if we had more people, but it takes the promotion to get the more people to do it.
A lot of it too is that we have a system that's been working for us, and people stick with what works.