My familiarity with takings law is somewhat limited. Sadly, the Supreme Court didn't have it wrong in all of the controversial cases. Our Constitution's protection of private property is limited. The text only mandates that the taking be "for public use," which by its plain terms does not require that the public own the condemned property, only that the public gets use out of it. So yes, as long as Uncle Sam justly compensates me, he can take my house to build a shopping mall. It is impossible to refute the notion that the public uses shopping malls (or hotels, restaurants, golf courses, etc.). Sometimes the Constitution allows things that really suck (and anyone who thinks otherwise is reading the document in a result-oriented fashion that suits themselves).
That said, there was a case in Hawaii I think in the 1990s. That one really did piss me off. The state decided that too few people owned too much of the land, so they sold it off to private parties. The Court's reasoning was that because members of the public were buying the homes, it was public use. That went WAY off the deep end and practically eviscerated "public use" of any meaning. Classic Robin Hood if you ask me. (Unless we're dumb enough to assume that these new homeowners opened their houses up for the public to just walk into and out of whenever they felt like it. Hey, some fraternities seem to operate that way.) In other words, the Court weakened what is already a weak protection against eminent domain.
Congress and Bush have no power to reinterpret the Constitution, however unfortunate some of its decisions may be. Also, I'm not too clear to what extent eminent domain falls in the executive realm versus the legislative realm, so if Bush orders anything that seems to preempt legislation, he might run afoul of separation of powers. It isn't clear that this order does a whole lot, but this may be a case where symbolism is (or comes close to being) about the most the president can do without overstepping his bounds. I think the major issue is how strong can an executive order on this issue be without violating the constitutional separation of powers doctrine. It's worth exploring further, and I'd love to hear some thoughts from any lawyer familiar with the interplay between takings law and separation of powers.
Bush SHOULD run afoul. When people squawk, then tell them to take a hike. Let it re-enter the courts. A constitutional showdown would be most welcome.