The point of that law is for Sarkozy to befriend artists, who had traditionally supported the left, and generate yet more infighting in the socialist party (artists are bitterly divided about this law in France).
But it is exceedingly rare for the Conseil Constitutionnel to so thoroughly contradict the government's intent - they will usually comment on very specific points, and require smallish adaptations that do not change the law's intent. In this case, it is the most important measure that has been forbidden.
Sarkozy has wasted a lot of energy and parliamentary time (he already lost a vote on this topic a few weeks ago), but he will not back down.
Pity the opposition is nowhere to be seen to take advantage, in the media, of that mess (they've down the background job of getting recourse to Conseil Constitutionnel, and fighting in parliament as procedure allows, but in the media, not so much). In the long run, we're all dead. John Maynard Keynes
It's impressive the amount of time and energy the right wing is able to spend on something that is of relatively minor importance. But then elections won't be lost or won on Hadopi, and it at least is useful in hiding the other doings of the governement. Un roi sans divertissement est un homme plein de misères