A story in Slate nicely sums up just what bothers me about the State Secrets privilege:
It has long been the view of the Bush administration that nothing can be deemed illegal so long as it remains a secret. Never mind that it's a secret only to people living in igloos without wireless service.
Now, I will concede there are things the state or government justifiably needs to keep secret. However, I would also argue that without any oversight, any entity with power who can unilaterally determine what should be secret and what should not will keep secret more than it needs to, and will likely keep secret things which would embarrass or undermine its power, rather than legitimately threaten the larger security of the state. I don't know the best way to balance a need for classified/secret/clandestine arrangements with a need for oversight and some transparency, but I know I don't like the way it's being handled right now.