Why wasn't Stanford sued into oblivion for this?

Probably the most important fact that would ruin any potential case is that NOT A SINGLE STUDENT ASKED TO QUIT. Watch the movie again, even in real life no student tried to quit. Some tried to manipulate their way out by asking to go to a doctor but none blatantly said they want to quit the experiment. Even in the movie they point out how fascinating it is that any one of them knew they could quit but still choose to aim for parole or "escape".

Furthermore all of the subjects stated, days to weeks afterwards, that none of them suffered any real emotional damage or pain. In the moment it seemed bad but after a few days back in the real world thy were able to re-adjust.

In the end it doesn't matter what's right or wrong. If none of the subjects felt like any real harm was done to them then no one will go through the long and arbirous process of getting a lawyer, then breaking down contracts and release forms, plus proving beyond a reasonable doubt any wrong doing.

No one was physically harmed, especially not in any permanent way. They all signed contracts and release forms, also the experiment was funded by the U.S. Office of Naval Research. I'm sure they would of helped bury any legal action since they would of been named in any civil suit.

"Common sense is not so common"

this is a movie and it didn't actually happen in the way its portrayed here is also a huge reason, I'm guessing, based on what I've read about the film.

-Sitting on a cornflake waiting for the van to come

It’s a film based on a true story. Everyone was fine afterwards in the true story. Obviously the film is going to make it look far worse. Don’t worry.