This whole moderating thing is BS.
The only level that could really amount to a lawsuit is a Muppet Movie level because that's the only intellectual property it would be infringing on/confusing people about.

Anyone who confuses the God of War LBP level with God of War either never played god of war or is a complete moron.

Do game companies sue the publishers of web comics? No, because it's satire.

Not to mention the fact that they're free.

It's clearly BS. Now I just want to know why they're really doing this.

Sony is doing this because they are a multi-billion dollar international corporation and it's better to be safe than sorry.

In order to be a satire, it has to make some kind of "comment" about the original work. I'm not sure what this thread is about, but you can't just copy something and deem it a satire.
Satires are an exception to the "copyright" rule because whoever made the rules thought that someone's free speech to "criticize" the work outranks copyright privleges.
LBP could also be considered a "parody," but I'm not sure how protected they are under free speech, but I think they would be, at least under some circumstances.
I'm not sure why game companies don't sue, sometimes people don't sue because they'll look bad if they do, especially if someone isn't profiting and giving free advertising.  

I think it's parody that doesn't infringe on copyright, not satire, but LBP doesn't fall under either.  While I would LOVE to play through a complete series of Mario levels in LBP, it's easy for me to understand why I cannot.  Please explain to me how Mario LBP levels somehow make some sort of statement against Mario, or would be seen as making fun of Mario games?  They wouldn't, and that wouldn't be their reason for existing. 

If someone is making Mario, or Mega Man or Castlevania levels for LBP, they'll be doing it for the fun involved, and not because they're making some sort of social observation, or wish to attack Mario or Mega Man in a humorous manner.  With that said, I still think that Mario LBP levels should be allowed, because it's user-made content, and no one is making money from it.  Sadly, the law doesn't agree with me.

However you want to define it (and there is some satire out there in some of the user created levels) many of the pieces people have uploaded are commentaries on particular games or genres, not attempts to wrest the intellectual properties from their rightful owners for profit.

Think about how many youtube videos are up (especially after the Be Kind Rewind movie) that satirize, parody, or just plain mock real big budget films.
It's the same kind of thing.

I'm just glad I didn't preorder at gameslop for the god of war content. What good is it if they're going to delete anything you make with it?