What's shocking here is not that the Obama administration invoked the state secrets doctrine. The Supreme Court has long recognized that evidence may appropriately be withheld in litigation where public disclosure of the evidence could jeopardize national security. But the notion that the entire subject matter of a lawsuit could be a state secret, such that a law-free zone is created for that subject matter, is a highly controversial one, for obvious reasons: it is a notion that is utterly toxic to the rule of law. And the district court decision that the Obama administration is now defending took this dangerous notion to an extreme. It concluded that the CIA cannot be held accountable in a court of law for any actions it takes in connection with its foreign operations. Since the entire purpose of the CIA is to conduct foreign operations, it is not too much of a stretch to say that the court's decision would largely remove the CIA from the reach of the law—even if the CIA is doing something as illegal and reprehensible as outsourcing torture.
I think the author is somewhat overheated here. Two points on this-
1.) Holder's explanation was that they have not yet conducted a review of state secrets policy at the DOJ, and were going along with current litigation as planned, as opposed to having individual US Attorneys crafting their own policy ad hoc.
2.) I don't think it's fair to state that, just because some activities of the CIA aren't reviewable in the courts, that the CIA operates outside the rule of law. Congress, particularly the select committees on intelligence, have security clearance to review and conduct oversight on all activities of the CIA. The courts can't rule on a president's foreign policy choices either, but that doesn't make them "outside the rule of law." Members of Congress as well as the president are charged in their oaths of office with upholding the constitution. I agree that recently, that duty has been abdicated to the courts, but it's important for those branches to take seriously their responsibilities for upholding the rule of law and the constitution in the areas where they conduct policy or oversight.
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