“Secondly, the constitution requires that a president be a natural born citizen. To be a natural born citizen, he cannot have had dual citizenship at any point in his life. So citizenship of Indonesia, even if he had American citizenship simultaneous to it, would make him constitutionally ineligible for the presidency.”
Sorry, justice, this is not true. Any country can confer citizenship on anyone it wishes. If Bolivia confers citizenship on one of our candidates, you think that would mean he is suddenly ineligible? Nope.
The candidate would have had to apply, renew, or voluntarily show allegiance to the other country As An Adult in order to have his natural born citizenship, or any citizenship status, be called into question. Conferring foreign citizenship on someone by dint of parents or spouse is a nonissue for USA citizens.
Application to the Obama situation: his purported Indonesian citizenship as a child is a nonissue. However, if he renewed his Indonesian passport after age 18, and/or traveled under it to Pakistan, or applied to college as a foreigner, these facts would, if not outwardly disqualify him, make him a very unattractive and disloyal candidate for leadership in this country. He could not win if this were finally to be proven.
You are probably thinking of honorary or ceremonial citizenship, as opposed to substantive (for lack of a better word) citizenship. That's a horse of a different color. But you have to consider the historical context in which the Constitution was written. The founders didn't want anyone with even the slightest suspicion of loyalties to another nation (anywhere in their background) to assume the presidency. If you had loyalties elsewhere by being born to one parent who was a citizen of a foreign country, regardless of where you were born, you can not be president.
BTW, I wouldn't be surprised if some presidents were made honorary citizens of foreign countries during their presidencies and still ran for second terms (or in Franklin D. Roosevelt's case, a third and then a forth term).