I agree with you. PresBush is proposing an offer that would grant legal status to illegal aliens. That is a pardon and in effect, that is amnesty. The President also has no obvious desire to see the borders sealed.
This is a case of political pandering to the Hispanic community. It's supported by the pro-amnesty/open borders contingent of pandering politicians, hardcore leftwingers, social liberals and all manner of libertarian thinkers.
Thank God the American people are smart enough to see through this bad policy proposal and oppose it in significant majorities.