I haven't weighed in on the small-potatoes scandal of the AIG bonuses, but I think there is a useful connection to the bigger issue of bank nationalization.
Apparently a few of the AIG millionaire execs who might be taxed out of their bonuses have little to do with the problem (a tangent - interesting legal issues with taxing bonuses, and I don't think anyone knows the answer about legality). It's impossible to sort between the undeserving and the deserving though, so the fair approach according to the execs is to give all of them the money.
The problem is that the money comes from taxpayers who rescued the company from bankruptcy that would've voided the obligation to pay the bonuses. It's hardly fair to taxpayers to punish them twice for something they have even less relation to than these AIG execs, even the less-sinful ones. As between unfairness to the AIG execs or unfairness to the taxpayers, I think it's time for some rain to fall on the heads of the execs.
The same issue arises for toxic assets - if the market is undervaluing them due to a lack of liquidity, it would be unfair for the government to take them from banks at a near-market value. On the other hand, if they are truly toxic assets, then taxpayers are screwed if the government buys at inflated value. Finally, if we buy the assets at near-market prices, the banks would go under and their creditors would suffer potential disastrous losses.
My guess is that the best thing is to make the creditors suffer as disastrous losses as they can bear before overloading the international financial system. Nationalization, government takeover of toxic assets, and partial payments to bank creditors should be the alternative to massive subsidies or to bankruptcy. Obama's taking it to easy on them.
For an alternative view that's far better informed than me, try Brad DeLong.