University of Wisconsin law professor Ann Althouse is also troubled, and has a commentary well worth reading at her blog (link). In short, she thinks that the constitutional language on which AG Madigan relies should be interpreted by the Court to preclude any action on its part in this circumstance -- in other words, any removal from office should be via impeachment and conviction rather than judicial fiat.
Here's Althouse:
In the Illinois case, ... [y]ou have a lower executive branch official, the Attorney General, bringing the accusation, and the state supreme court is asked to make the final call, deciding by fiat that a democratically elected Governor should be thrown out of office. Now, there is that state constitutional provision -- Article V, Section 6 -- but the question is how broadly to interpret "other disability," a term that appears on a list that includes "conviction on impeachment." Clearly, "other disability" ought to be defined narrowly so that it does not obliterate the safeguards of the impeachment process.
Althouse also cites a source that speculates that Speaker Madigan is moving slowly on impeachment, a process which is his to initiate in the Illinois House, to allow his daughter the Attorney General to get some favorable publicity, by looking tough on corruption, that will help her future political career.
A second reason I think is that Illinois Democrats are afraid of what Blagojevich might say about them in a public impeachment proceeding, making removal by judicial fiat the preferred approach, however tenuous constitutionally, and within the realm of possibility given that this, after all, involves the Illinois Supreme Court. Furthermore, there's the chance that Blagojevich will resign from office, avoiding the need for impeachment altogether. Judical removal or resignation could come much sooner than impeachment and conviction; the shortest course to removal is desired since the longer Illinois goes without a second senator the louder will be the calls for a special election, which the Democrats could well lose.