So.... is this establishing the precedent that the president can decide what is unconstitutional or not?
No, the executive branch is tasked with
enforcement of the law; the Attorney General is the chief LEO of the United States.
The
executive branch has declared it will no longer enforce this law. The
senate could compel them to through the
justice department, if the constitution is on their side.
EDIT
It's similar to the way Denver police have stopped enforcing marijuana laws in a majority of cases. If someone really challenged the legality of it, they would have no choice but to crack down on pot again, but the political will simply isn't there.