To me it all comes down to the following issues:
1) Hypocrisy-- Bush has been very outspoken about how much he hates leaks and leakers for 2 years. If he ordered Libby to selectively leak classified documents to selective members of the press for political purposes that makes him a boldfaced hypocrite.
2) Secrecy-- If Joe Wilson was such a liar and they wanted to counter his claims by declassifying intel they should have done it out in the open, not behind closed doors with select reporters using (barely de)classified documents. Fighting over the definition of "leaking" will get them nowhere. If they truly believed that Wilson was lying they should have publicly offered proof countering his story. Which begs the next question-- why did they do it all so secretly? What were they hiding?
3) Deception-- Considering points 1 and 2, did they know that some of the reasons for war they were peddling were bogus? Were they fully aware of the contradictory intel out there that undermined their claims? That instead of considering that they had bad intel or that they we didn't need to go to war they decided to discredit anyone who said anything they didn't like?
4) Limitless, Unchecked Power-- This isn't about whether or not Bush had the authority to declassify or if he followed the right channels to do so. This is about the Bush Administration believing that it can do whatever it wants and that it doesn't have to answer to anyone.
5) Lying to Wage an Unnecessary War-- This story could confirm that the Bush Administration knowingly lied and misrepresented their Iraq intel because they decided to attack Iraq first-- the justifications for the war were an afterthought, sloppily slapped together.
In all honesty, this story isn't about anything we don't already know-- that the Bush Administration's MO is secrecy, stonewalling and an awesome sense of entitlement to do whatever, whenever, and that no one is ever allowed to challenge their powers. It is what makes them so dangerous. They believe they are the law and they are above the law at the same time.
I don't think this story is the last straw, but I have a feeling it could be one of the last ones. If Bush's ratings sink into the 20s the GOP cannot just sit there while he turns the party into an international joke.