I (along with Scott) manage and work with large events (much larger than Recess) in a professional context. I'm the "Director of Panels and Workshops" for Connecticon, for example, with a turnstile attendance around 18,000. I have no role in NerdNYC other than attending events, and I do not speak on behalf of NerdNYC or any of its officers. But I do speak as a professional event manager.
I don't think everyone here truly grasps the difficulties in juggling event insurance, venue restrictions, fire code, liability, and the like. It takes a great deal of time and money to handle these things correctly.
Many smaller groups get around these concerns by not worrying about them. Larger groups hire people to manage them. NerdNYC is between these two levels: the hardest possible place to be.
Ignoring them isn't an option. Lawsuits and other nasty eventualities aren't super common, but the risk to the individual people who make awesome things like Recess happen are very real. The liability can become personal, and I've known individual people who were faced with extreme personal hardship as a result of it.
Would you be personally willing to risk all of your own savings (and more) for a gaming night? Is that a reasonable expectation of anyone?
The other side isn't feasible either. Do you want NerdNYC spending all of its money on lawyers and administration? Would you pay double or triple (or more) to change things? The next "level" of professionalism/corporation is a HUGE difference from what you have now, and comes with all of its own baggage.
Organizers of events like this have been sued personally in the past. It's messy. It sucks. I've known some of them personally.
I am not a lawyer, and cannot give legal advice. But I can tell you exactly why things like this happen. For example, event liability insurance is often substantially cheaper where minors are excluded. Larger venues often provide such insurance as part of their space usage contract, but smaller venues do not. Many events in New York City in particular have far less insurance than they think they do, as they are often unaware of the lack of said insurance in small venues. I have no idea what 440 Studios has or provides, but generally one can assume that small venues have nothing in place for you.
ASCAP is another surprising concern. Again, larger venues often cover it, but small ones do not. Playing music at an event can get you in real trouble depending on the venue's existing relationships. Figuring it all out isn't easy.
Fire code stuff is a huge concern. I've had the fire martial walk into events I've helped managed and watched them count individual heads in a random room. They have the power to shut down an entire event at any time if they see fit, and can show up anywhere.
There are different kinds of event liability insurance, and also different actions event organizers can take that may or may not undermine said insurance. It's easy to screw up and not actually be covered if something happens.
Basically, in my professional opinion, based on everything I've seen and read, NerdNYC is doing the best they can reasonably be expected to do in regard to this particular issue. If you want a neutral (again, I have NO professional connection to NerdNYC and do NOT speak on their behalf in any way) opinion or have any specific questions about the complications of event management, I'd be more than happy to answer them.