That's what I felt in my stomach after reading summaries of President Obama's speech (I was at work and didn't get to actually hear it), including what Hilzoy wrote at Obsidian Wings. What troubles me the most is his statement that he will not release those who he feels are threats to America, even if we can't convict them in court or a military tribunal. He's essentially embraced the indefinite detention policies that helped turn public opinion against President Bush.
I disagree with the notion that we should not let people go who we cannot convict. I understand that there are some individuals who are indeed threats to America and who would likely attempt to harm America if released and given the opportunity and that we cannot convict them because the evidence against them is tainted through Bush Administration era torture or other means. That being said, I find the answer that "the state can't convict them, but the state's decided that they are dangerous, so the state is going to keep them imprisoned for as long as they want for the state's protection" to be a very dangerous proposition.
This is not what free countries do. It's what tyrannies, regimes, and totalitarian governments do. The state fucked up. The state needs to own that fuck up and accept responsibility for whatever damage comes from it, and they'd better 1: not make those mistakes again and 2: do their damnedest to keep any residual damage from their fuck up happen to the citizens - and do so within the laws of our nation and the international community.