First, of course, was the instant reaction: this was a fearmongering old chestnut, wasn't it? Tsk, tsk, Hillary.
Second: That said, on a fearmongering scale of 1 to 10, it maybe rated a 2. It was a cupcake. The images were relatively soft, there was no scary background music, no scary brown people lurking around, and no one was mentioned by name. The lefty blogs went crazy anyway, and I have to figure that Republican strategists were laughing their asses off over this. They're probably rubbing their hands right now and figuring that if this is all it takes to get the libs flustered, maybe they have a shot in November after all.
Third: Obama handled the whole thing perfectly. Instead of going ballistic, he acknowledged that it was a legitimate subject. And it is. Who do you want in the White House the next time a crisis hits? That's a pretty important question, no? And Obama just calmly made the case that the answer is: Barack Obama. (And then put up a response ad almost instantly.)
And finally: what a PR bonanza for Hillary! You can't buy this kind of coverage. Whether or not it works is an open question — probably not, I'd guess — but it shows that her team still has some campaign flair left. For now, anyway, she's once again the center of attention.
UPDATE: On the other hand, flair isn't everything. Smarts count too, and if you run ads like this you really need to be prepared for the obvious followup questions.