I lived in San Diego for ten years and witnessed this battle through a decade of rulings, appeals, challenges to appeals and political machinations so thick that we never thought we'd see the end of it. Contrary to the linked article, the cross isn't in the wilderness somewhere, it is in metro La Jolla, and alongside one of the most heavily-travelled California highways. Originally it wasn't even a War Memorial, but something of a pilgrimage site for local Christian groups to hold prayer meetings. At one point the state sold the 5 X 5 patch at the base of the cross to a local group for resale to a Veteran's Memorial group so they could say that it was a private, not public religious display. Local atheist and First Amendment groups were unable to enter into competitive bidding for that land, and a Vietnam Vet brought a lawsuit against the state, and the sale was ruled illegal by the Circuit. A number of machinations were tried by both sides; it was even brought to a public vote in 2004 - Californians love to vote on these silly things - in which 59% of the population thought the First Amendment was a Communist Plot. The ACLU and Jewish War Veterans Association again successfully sued, and the Bush Administration tried to claim the land as Federal Property under eminent domain. Finally, in 2011 the Circuit Appeals found it an unconstitutional violation of seperation of church and state, and with SCOTUS now deniying cert, it looks like the conclusion of the saga has (finally) been reached. There is some kind of accommodation in the works to transfer the cross to a nearby Episcopal Church, so it will still be visible along the same road.
Interesting that although San Diego does have its Fundie population, the strongest voices for keeping the cross there over the years have been the neocons. Apparently an issue of freedom from state intervention. The logic of the position escapes me.