While I like the idea behind this legislation I think that in the end it will be found to be unconstitutional.
I agree, I don't think you can revoke somebody's right of assembly and right to peaceful protest on the basis of "being a dick." I like the idea of the human wall that the article talked about better.
So do I, and this has been done before in a number of different ways. I've heard of ex-military bikers riding between the protesters and the funeral to drown out the protesters voices (altho it seems to me that would probably drown out the funeral as well), and then there was that early case of people showing up dressed as angels, complete with wings, and getting between the funeral and the protesters. Once the protesters started up they all spread their wings and started singing hymns, effectively blocking both the sight and sound of the protesters in a completely legal way. And very appropriate for a Xtian funeral as well.
There are ways of dealing with people like the WBC without either engaging them directly (which is about as useful as arguing with a wall, and likely to become just as disruptive as the protest itself) or trying to pass iffy laws.