While there are certain circumstances under which I can accept that the government can refuse to submit certain evidence to court because it constitutes some sort of "state secret," it's fairly clear that this doctrine has been abused under the Bush administration.
This is a great write up about what's been happening in Oregon to the American branch of an Islamic charity called Al Haramain. The government accidentally disclosed proof that it was wire tapping the organization and then rendered this proof inadmissible by citing "state secrets." It's pretty much known that the government was indeed wire tapping the organization, however, this cannot be a factor in the court case.
Isn't this a great country where the government can do whatever they want and not be held accountable in court anymore?