This article sums up the argument well, and supplies some really good court precedent for the side that won the day. Too bad the Arizona GOP/TP didn't read up on their civil rights law before becoming lawmakers.
My Liberty Stops At Your Body
Ultimately, the question facing anti-gay business owners, even if the bill Brewer vetoed had become law, is why it is acceptable to exclude gay people simply because of who they are, when we do not permit this sort of behavior by racists such as Bilbo or Byrd? And there is another, equally difficult question facing advocates of the kind of sweeping “religious liberty” protected by the Arizona bill — why should we allow people to impose their religious beliefs upon others?