Ace of Spades:
It is accepted constitutional law (whether you agree or not, it's accepted) that states cannot pass laws which conflict with federal law in areas of federal jurisdiction.
In this case, however, the Arizona law does not conflict with federal law; it in fact restates it.
So yes, federal law trumps state law, but does mere federal policy trump state policy, especially when federal policy is in fact at odds with its own stated law?
Can the feds basically argue that it's their policy to ignore the law and then demand that Arizona be instructed by the Supreme Court to follow them in their policy of ignoring the law?
Well, the feds obviously can and are arguing that. Can they win the argument? Maybe on grounds of national interest vis a vis immigration as a vital component of foreign policy? Except, if the Executive is set up as all powerful arbiter of immigration, then Legislative Branch power is usurped.
I say this case is a big deal. If the Executive doesn't want AZ enforcing law which is identical to existing federal law, then the Executive ought lead the Legislative Branch into changing existing federal law into something which the Executive finds palatable. I say the Legislative Branch can lawfully curtail the actions of the State of Arizona. The Executive cannot. This federal lawsuit must fail: the State of Arizona deserves to prevail.
Bonus: from PJTV, my favorite Barack spoof so far.
Bill Whittle said the one thing Barack cannot weather is the public laughing at him. Because Barack is propped up as a super intelligent transcendent savior, therefore Barack is set up for a catastrophic Humpty Dumpty fall; for public ridicule via a "the King has no clothes" moment; for a pull back the curtain on the Wizard of Oz moment of clarity. Barack can weather heated criticism. What he cannot weather is scornful laughter from his public. He cannot weather being made to look ridiculous. A transcendent savior barely gets to look mortal; definitely does not get to look ridiculous.
If the public begins to scornfully laugh at Barack, things could go really bad for him in a hurry. Really, deeply bad. The only supporters who would remain for him would be the same bleeding hearts and/or race-first supporters who believed OJ was innocent.