As stated elsewhere, the great danger is that a reorganization would fail due to tight credit markets.

In a normal economic situation, a GM bankruptcy would be good news. The company could be held in trust, re-organize itself, and become profitable for (some) creditors.

Right now, credit is tight, investors are skittish, and government resources are stretched. It's not that GM is too big to fail. It's that GM is too big to fail right now.