I haven't written anything about the Ward Churchill situation, but I'd like to point to a post that I think nails it pretty well. Brian Leiter has summed up my thoughts pretty well in this post where he defends the man's academic freedom. From what I've seen, Churchill is an arrogant and mediocre man and his opinions are certainly quite offensive on the subject of controversy. It may well be true that the university made a mistake in hiring him. But that would make him no different than 10,000 other mediocrities in academia in many other fields. The bottom line for me is that I'm not willing to allow this precedent to be set because the principle of insulating academics from the shifting tides of public opinion is far too important to the institution itself. If we allow public outcry over offensive opinions to justify firing this man for this opinion, no matter how offensive we find it, there will be no principled way to hold the line against this scene repeating itself in the future. I view this very much the way I view the Nazis marching in Skokie. The ACLU was right to defend that because the principle of free speech was more important than the offensiveness of the views being expressed.
From what I've read about Churchill, you're being generous to call him mediocre. He's an academic disgrace, with credentials so weak I don't see how anyone could have voted for his tenure.
That said, morons have a right to be morons.
Now, if there's some fraud in his academic background, or some lies told along the way, those should be grounds for dismissal.