Was Article III Repealed Earlier This Week?

Many bloggers have already taken whacks at the non-argument, made by Alan Dershowitz and recycled by Marty Peretz, that the Libby conviction was a political conspiracy by conservative Republicans against other conservative Republicans. Obviously, having set this standard of stupidity nothing can really top it, but I was also struck by this claim:

Only President Bush’s political judgment was constitutionally sanctioned, and that is because clemency and pardon are explicit rights of the chief executive.

Uh, what? Since when do federal courts duly created by Congress not have the constitutional authority to pass sentences (that fall within the George Bush approved federal sentencing guidelines!)? What constitutional provision requires appellate courts to grant bail on appeal to every convicted individual? Help me out here.