They are arguing that since there isn't proof beyond a reasonable doubt that Craig was going to have sex in public, his solicitation is protected by the First Amendment:

In its brief, the ACLU argues that the government can arrest people for soliciting public sex only if it can show beyond doubt that the sex was to occur in public. Solicitation for private sex, regardless if it occurs in a bar or a restroom, is protected speech under the First Amendment. When free speech rights come into play, police enforcement actions must be "carefully crafted" so that they don’t unnecessarily ensnare people who are engaging in constitutionally protected speech.

Oops! I guess the legal standard isn't "Dan Savage and a homophobic police officer must be really sure you were going to do something bad" and is related to principles of "evidence" and "doubt". (Then again, what do you expect from someone who refers to Craig's home state as "Idahomo". sigh)

Getting back to the issue of "hypocrisy" and whether we should defend someone's civil liberties even if that someone would have voted for a bill to make gay men waving their hands and tapping their shoes in public restrooms illegal (I'm totally sure Craig would have given that an "aye"), openly gay ACLU exec director Anthony Romero said:

Senator Craig has not always been a great friend of civil liberties, but you shouldn’t have to endorse the civil liberties of others to keep your own. Government should make public restrooms safe for all, but it should do so in a manner that is really designed to stop inappropriate behavior, rather than destroying the lives of people who might have no intention of doing anything illegal.

It all comes back to the question of what sort of victory we want here. I agree that this situation is inherently funny and that Craig's a major douche, but are we going to start running right-wing arguments for them, calling this behavior despicable, ostracizing someone who needs help, legal and otherwise, condemning someone who did not, and for whom there is no evidence that he was going to, commit an illegal act, drawing tenuous-at-best connections between pedophilia and homosexuality, and making gay jokes at his/our expense? Isn't that sort of behavior ultimately counterproductive to our goals of sexual autonomy, respect for others (and Others), and developing a fair and just system of governance?

Because when we start drawing lines around those for whom we have a hard time feeling sympathy, we're only legitimizing the behavior of those who have a hard time feeling sympathy for us.