The Washington Post had what I thought was a good editorial on this issue this morning:
http://www.washingtonpost.com/wp-dyn/content/article/2010/04/18/AR2010041802818.html
I really feel torn on this, and ultimately have a lot of sympathy for the CLS position. Imagine some small, publicly-funded group with an extremely unpopular message (an on-campus branch of NAMBLA, for example). If such a group was required (in order to continue to receive public funding) to accept all applicants as voting members, the group could (and probably would) be co-opted by the large majority who opposed the original group's core message and agenda. Thus, the original message of the group would effectively be silenced. That doesn't sound right to me.
My feeling is that a publicly-supported group be required to accept as "participant" members all who apply, with the proviso that a good-faith condition of continuing membership be that such members not engage in behavior destructive to the group's core purpose. I also think it's reasonable that such groups be allowed to restrict voting rights to those allied with the group's core purpose.