There is a big difference between what "should be" and what "is".
Code does not execute 'law', it executes the whatever the coder coded. Hopefully if they are a good coder it executes what they intended to code. Wishing the courts were obsolete does not make them disappear.
You're right, on one level The DAO is just an app on Ethereum. However the same people play a prominent role in both entities. Which is why it is Vitalik and co trying to convince everyone to fork. No fork = potential massive law suit. This is what 'is'.
I hear a lot of talk about blockchains being "neutral" and "immutable". I don't see it. They can be (and are) forked based on consensus. They are not 'trustless' because users 'trust' that the majority of miners will act only in the interest of the protocol. Even deciding what is in the 'interest of the protocol' is subjective, see for example the Bitcoin block-size debate. This is an inherent 'weakness' (or strength depending on your view point) of ALL blockchains.