Are you crazy? Do you looking to justify them playing "victim"?
No. Only if he is absolutely sure that he can win should he do anything, and then primarily against the enablers.
Here's the point: dems will play this card every time until someone slaps them down.
If Cain does not do this, it will be the only issue the press will care about. It will never disappear; it will show up in the first paragraph of his obituary years from now.
I would not expect that any lawsuit filed now could be resolved before the election, but as a demonstration of his innocence and outrage it would have a huge impact.
It would also cause the dem defamation industry to think twice.
In short, Cain's obliged to do this, not just for his campaign, but for the future of the conservative movement.
Call their bluff.