Seems plausible to interpret "default case" as meaning "the case that will most probably occur unless steps are specifically taken to avoid it".
For example, the default case of knocking down a beehive is that you'll get stung; you avoid that default case by specifically anticipating it and taking countermeasures (i.e. wearing a bee-keeping suit).
So: it seems as though the "default case" of a software company shipping an application would be that it crashes, or goes into an infinite loop - since that's what happens unless steps are specifically taken to avoid it.
The term "the default case" seems to be a way of making the point without being specific enough to attract the attention of critics
[...] SIAI's Scary Idea goes way beyond the mere statement that there are risks as well as benefits associated with advanced AGI, and that AGI is a potential existential risk.
[...] Although an intense interest in rationalism is one of the hallmarks of the SIAI community, still I have not yet seen a clear logical argument for the Scary Idea laid out anywhere. (If I'm wrong, please send me the link, and I'll revise this post accordingly. Be aware that I've already at least skimmed everything Eliezer Yudkowsky has written on related topics.)
So if one wants a clear argument for the Scary Idea, one basically has to construct it oneself.
[...] If you put the above points all together, you come up with a heuristic argument for the Scary Idea. Roughly, the argument goes something like: If someone builds an advanced AGI without a provably Friendly architecture, probably it will have a hard takeoff, and then probably this will lead to a superhuman AGI system with an architecture drawn from the vast majority of mind-architectures that are not sufficiently harmonious with the complex, fragile human value system to make humans happy and keep humans around.
The line of argument makes sense, if you accept the premises.
But, I don't.
Ben Goertzel: The Singularity Institute's Scary Idea (and Why I Don't Buy It), October 29 2010. Thanks to XiXiDu for the pointer.