It is completely outrageous. Cyclists have a right to be there. As do pedestrians. Drivers have a duty to give them room and not endanger them. Helmet is irrelevant.
Before you wring your hands so much that they drop off, note this: there was no finding of contributory negligence by the cyclist. The court clearly stated that a helmet wouldn't have made any difference in this case.
In fact, based on this judgement (although it's by no means certain that it's going to be applied in future cases), the only time someone could be found liable for contributory negligence is a) if the accident happened at less than 12mph, and b) if the injury was one that a helmet could have prevented, i.e. a fairly specific type of head injury.
There was a comparison drawn in this case between helmet wearing and seatbelt wearing (in the context that it didn't used to be compulsory to wear seatbelts). I thought this was pretty apt, other people might feel it was flawed. However I don't think this is going to open the floodgates for drivers to waltz off scot free after mowing down helmetless cyclists. That isn't what happened here at all.