If a state legislature writes a law prohibiting this a person can sue that it is unconstituional and the law can easily be maid null and void by the men that were black robes.
That is stage 2. The SCOTUS ruling will be held to be more restrictive.
The most salient point about O'Connor's dissent is that the people who will be harmed will be the one's without resources: i.e., the poor and the middle class. It will be a lot easier and attractive for a local government to "take" marginal properties when McMansion Developers, Inc. comes in with a blueprint to cram 50 new, higher-tax generating homes where 15 now sit. This is a no-brainer. We have to especially defend the poor on this. If people get comfortable thinking "my property's not at risk because it's worth too much", then this will never be reversed, and shame on us as a people if that happens.
No. Absolutly not. You completely mis-read the ruling. It said that it is not unconstitutional for a muni to use immenent domain. It does not say that a city has a constitutional right to use immenent domain in this way.