Great. So the government can decided to do whatever it likes with my property, so long as someone claims to think it's for 'public interest'.

To me, the entire point behind property is that it's yours and you can say what to do with it. The fact that the government can't pony up enough money to simply buy out an entire neighborhood isn't really all that comforting, as there are certainly companies who can.
Basically this sounds to me like Wal-mart could, through the local government, buy a neighborhood and put those people on the streets. Depending on property taxes and the result of the market being flooded with people looking for houses, those people could very well end up worse off than they were. And it's all completely legal as long as the new Wal-mart dutifully charges a sales tax.
Edit: I really don't care if that's exactly what's being argued or not, that seems a trivial difference to me. I'm really surprised I've never heard anyone complain about this, and I never thought of it this way as in the passage it's put in the negatory.