I am not a legal expert, so I can't say if the court ruling in Illinois that struck down (modest) pension reforms is a good one or not. The author at the link seems pretty angry at the judges, but I am not sure their decision was unreasonable given the language of the state Constitution. The root-cause problem seems to be this provision of the state Constitution
“Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
This is government of, by, and for state employees. Pension benefits can never be lower than they are right now, so there is always a ratchet effect. One mayor caves to a stupid contract, and we are all stuck with it for life. I am pretty dang certain their constitution has no similar provision protecting, say, taxpayers. Can you imagine a ratchet in the constitution that says that tax rates can never be higher than they are today?
We actually need this disaster to drag out for a while until after Obama is out of office. A federal bailout request is coming soon (you don't think any of the participants expect to pay for this mess themselves, do you?) and Obama is incredibly likely to shovel them as much cash as they ask for.