The 5th amendment says "…nor shall private property be taken for public use, without just compensation." And the supreme court decided that if the state took it, that made it public use.
So, was it stretching things to say that taking homes for commercial development counted as public use? Clearly it was beyond what most people would view as public use. And personally I would have been very comfortable with the supreme court finding that this was unconstitutional.
But I also find it a reasonable decision to say that because there is an argument that this counts as public use, not the best argument but one that is logical, that the court should not step in.
And I think this is not judicial activism because the court is neither mandating nor outlawing something. Instead they are allowing the state to take an action. And the legislature in each state can outlaw that activity. Already many states are taking up that exact subject.
People need to separate their views on the specific action of New London (which flat-out sucks) from the legal decision the court made. Just because an action is bad is not a reason for the court to outlaw it.
And for those who are very conservative - you can applaud the court for not being an activist court in this case. (Bummer when you wish it was in this case - huh?)