The state has every right to protect its assets (its cities are definitely its assets) in the same way the federal government had every right to impose civil rights into states that were unwilling to adopt them (the cries of usurping democracy came strongly out of the South in the 60s, let's remember). At this point, I would definitely vote for a 2nd term for Snyder (and I never vote Republican, for the record). He's not a Tea Party ideologue, as Rachel Maddow and Mother Jones have tried to portray him; he's actually very centrist and intellectual.
I dislike contracts being remade by nondemocratic managers, but I also think that the general welfare of the citizens of the city needs to be a first priority. It's a hateful messy situation. What my relatives tell me about he Gov is that he is way more moderate then he has been portrayed and that for lifelong democrats they don't find him all that satanic.
But I agree with b_b that at some point this is the perrogative of the State. Michigan depends on a Detroit being functional, and it is far from it. The State has to be able to step in and clean up. Detroit government is ridiculously corrupt and inept. It needs a dictator for a while.
[1]http://www.reddit.com/r/politics/comments/pqnyo/michigans_ho...