Yeah, that would be bad.  But, two things...

1.  Judge Judy says she was just the same in real life Court as she is on Judge Judy.  I have seen proof of that in real New York Court footage.

2.  We all know that it is a tv show and what that entails.  We even know that litigants receive money no matter if they win or lose.  That has been known about court shows clear back to the Judge Wappner days. 

With years of experience in the New York family court system, Judge Judy has been at the center of her fair share of controversies and triumphs in her public campaign to improve the family court system. Judge Judy has earned a reputation for being aggressive, decisive and insightful in her rulings and is admired for her compassion and outspoken style. Life on the bench has taught Judge Judy to cut through a dispute and get to the core of the emotional issue at hand. As a result, she is able to impose firm closure to the situation in a fast and fair manner.

"Humor is a key factor in what draws people to JUDGE JUDY's growing mass appeal. The American public likes the fact that Judge Judy is straight-to-the-point yet still has a tremendous wit that audiences can identify with," adds Randy Douthit, executive producer of JUDGE JUDY.
http://www.wchstv.com/synd_prog/judy/

Many people are surprised to learn that Judge Judy really is a lawyer. Television's favorite judge was a Corporate Lawyer and then a New York City judge before ascending to the celebrity bench. This program presents the story of how Judy Sheindlin made her way from law books to stardom. Interviews with those who know her best confirm that the woman who does not suffer fools gladly in the courtroom is the same in real life. Archival television clips present the best of Judge Judy. ~ Rose of Sharon Winter, All Movie Guide

If not for Judge Judy, we wouldn't have all these wonderful prank calls that make us laugh our butts off:

http://youtube.com/results?search_query=judge+judy+prank+call