Ok, here's what I read:
1. Man helps out friends, a lesbian couple, have children.
2. Man is known as biological father to said children.
3. Couple broke up, one is paying support.
4. In an effort to lower one party's payments, she goes after the father, who is known to be the father.
Now, in this situation, the children knew he was their biological father, he had an active role in their lives, and was essentially a third parent. That changes things up a bit.
If the man donated his sperm, but did not participate in the lives of the children, they never met him, etc. I'd disagree with the court.
As far as your typical anonymous donations, they should be protected from such action. And they should have no claim on any children that resulted from their donations.
There's a part in Legally Blonde (the first one) where they were discussing a man who wanted to get in touch with one of the children that was a result of his donation. Paraphrased, the quote was, "Why this specific child? If he's not seeking to get in touch with ALL the children that came about as a result of his donation(s), then he really has no claim on this one."
And I know how horrible it sounds to quote a movie about a "dumb blonde," but that part came to mind when I heard about this.