I don't really see how freedom of speech applies to tort. It is meant to protect people from government oppression. That shouldn't necessarily give you carte blanche to say or do whatever you want without civil consequences, though. For example, if I defame someone I could rightfully be sued for damages, and I doubt the freedom of speech argument would help me in court. I don't see how the case OP mentions is any different. The Supreme Court ruled 8-1 in favor of Phelps, though, so my interpretation must be pretty wrong.
The government absolutely should not criminalize hate speech (or any speech for that matter). However, guys like Phelps should not be shielded from civil liability IMO if people want to seek damages and can prove to a court that their demonstrations caused harm.