Judges don't have that ability.

They have the ability to determine punitive damages within guidelines (many states have caps, for example), and if the defendant feels the damages are unreasonable they have every right to appeal to a higher court. Eventually the Supreme Court may make an unappealable decision, but the appeals process has to stop somewhere.

And at some point society needs a way to tell people who ignore lesser consequences that they don't get to participate in that society any more. In this case I think Alex Jones crossed enough malicious lines to deserve it; he's in bad shape because he's the kind of person who accuses school shooting survivors of fraud even though he knew he wasn't true! He had every chance in the world to back off and apologize, but he didn't. He tried to avoid facing judgement by hiding behind bankruptcy. He is a very bad human being.

Now, is that always the case for this kind of judgement? Nope, sometimes the system fails. Some people would say Gawker is an example of that failure. I am not totally sure about that one, but even if it is... I'm reluctant to toss out an entire system unless it's a systemic problem. And Alex Jones experiencing consequences for lying for profit does not seem, to me, to be evidence of a systemic problem.