Even if you accept the fact that the Iraq war is illegal (which it is not) it is NOT the place of a junior officer to determine a war's legal validity. The requirement not to obey illegal orders only extends to those orders that are INHERENTLY illegal; i.e. murdering POW's and civilians, wanton destruction of private property, looting, etc. The lawful order to deploy to a war that has been affirmatively voted upon by the Congress of the US is beyond the scope of an artillery lieutenant to legally determine.
Even though the German Wehrmacht fought for one of the most evil causes in human history, no German soldier was prosecuted for conducting military operations within the established contemporary norms of the Rules of War and International Treaty Agreements. It was accepted that the defeated German Army had the right to court-martial those of their members who violated German Army regulations.
Lt. Watada should not be exempt from the just application of the Uniform Code of Military Justice as the US Army seeks to maintain morale and discipline in the worthy cause that his noble comrades are engaged in.