It is not “perfectly legal.” It is legal for a state legislature to pass a law that hands out electoral votes to the winner of the national popular vote. However, making the effect of such law conditional upon enough other states adopting it is an interstate compact, and as such requires congressional approval.
True, I would have constitutional problems with the National Popular Vote initiative for the same reason I have problems with states unilaterally seceding. It's that part of the constitution ignored by "states rights" freepers that specifically PROHIBITS states from doing taking certain actions without consent of Congress. In fact, I would say the founders inserted those restrictions exactly for situations like this... to prevent 12 or 14 large population states from getting together on their own and using their power to dictate to the rest of the states how some federal matter will be carried out. Per Article 1, Section 10.:
"No State shall, without the Consent of Congress... enter into any Agreement or Compact with another State , or with a foreign Power..."
So unless BOTH houses of Congress give them permission to have a "National Popular Vote compact" with several other states that have 270 electoral votes, it ain't constitutional. In any case, the way to get Congress to approve would effectively start a constitutional amendment process anyway, which was the point all along.
Of course, it WOULD be constitutional if a state were to, by THEMSELVES, pass a law to allocate all their electoral votes to the nationwide popular vote winner instead of the popular vote winner in their own state. That would actually be hilarious if a couple of heavily Democrat states did that, because it would be the only way they'd be in play for us during the general election, and the GOP wouldn't even have to waste money campaigning there.
For example, if Illinois had decided on their own to allocate their electoral votes to the popular vote winner in 2004, Bush would have gotten all of Illinois' 21 electoral votes despite the fact only 44% of Illinoisans voted for him. (ironically, that flies in the face of the "will of the people" and makes at least 7 million votes meaningless, but oh well) The results on election day would have been 307 Bush, 230 Kerry instead of 286 Bush, 251 Kerry. And Bush handily wins the popular vote over Kerry nationally whether Kerry's 3 million Illinois votes are added to the national total (giving him 59 million to Bush's 62 million), or whether nobody in Illinois votes (making it 56 million to Bush's 60 million).
It would be helpful to us if California, New York, New Jersey, Massachusetts, and Washington state all passed such laws on their own, since right now they're big electoral goldmines that we stand almost no chance of winning. As another freeper noted, it would be particularly fun if Massachusetts or some such ultra-RAT state was forced to cast all 12 of their electoral votes for Sarah Palin after Obama overwhelmingly wins their state.
But these states trying to run around the constitution and sign some agreement that they'll ALL simultaneously cast electoral votes for the popular vote winner once states that have 270 electoral votes join their cause is blatantly unconstitutional and I'd love to see someone bring up this point to "federalist Fred" Thompson and see his excuse. I hope some judge strikes this down if they accomplish their goal.