Most people use this software within the license terms - most importantly they distribute it with an offer to provide the source, and provide the source if asked to.
Who is the everyone the FSF could sue? Do you know of anyone else distributing a non open source derivative of any of this software?
The whole point of the GPL is to prevent people from closing open source software. If they do not enforce, they may as well just give up and put their software in the public domain.
How exactly is buying from MS going to help them? MS has (or any proprietary supplier) much stricter license terms, and is much more aggressive about enforcing them.
I suspect you do not understand the GPL. Read the explanations on the FSF site.
And it's not suicide for the FSF, Cisco will back down.
And then what?
I truly doubt that Cisco (which describes itself as a software company) would want that to happen.
The fact that it's never been seriously challenged in court is more a testament to it's soundness than anything else. A number of brilliant legal minds have looked at it and decided that challenging it would not be a profitable endeavour.
This is not true at all because regular software licenses are enforced under contract law and open source licenses are based on a legal theory about copyright law and granting permissions under a set of terms and conditions.
One way that this lawsuit could turn out to be a disaster is that the courts could decide to interpret the GPL as a contract rather than a (bare) license. As far as I can tell that would make it rather toothless and impractical to enforce.
When things that are as fundamental and important as that are still up in the air, you don't want to argue against Cisco's legal team about it.
With violations like these involving bare necessities of any application like gcc, binutils people would have no option but to pay MSFT or other companies. On these lines FSF can sue pretty much everyone.
This seems more like something went wrong with Cisco and Stallman and they suddenly cropped up.