Obviously, he didn't deserve it. And as Naomi Klein said (via Greenwald), who knows what kind of politics the Nobel peeps are playing here.
But the notion that this is "the last thing Obama" needs, as Time points out, is ridiculous, and says more about why Time is a rudderless wreck than it does about Obama. And insofar as the committee that gave the Nobel to Obama reflects a segment of world opinion that regards the Bush years as a nightmare, you'd think this would be cause for introspection among the Beltway elite that enabled Bush's worst abuses, as Josh Marshall points out:
But the unmistakable message of the award is one of the consequences of a period in which the most powerful country in the world, the 'hyper-power' as the French have it, became the focus of destabilization and in real if limited ways lawlessness. A harsh judgment, yes. But a dark period. And Obama has begun, if fitfully and very imperfectly to many of his supporters, to steer the ship of state in a different direction. If that seems like a meager accomplishment to many of the usual Washington types it's a profound reflection of their own enablement of the Bush era and how compromised they are by it, how much they perpetuated the belief that it was 'normal history' rather than dark aberration.
As for the conservative reaction to all this, it's been interesting, though not surprising, to witness the right's sharp pivot from "the interests of the president and the nation are one and the same and to root against Bush is tantamount to treason" to unabashedly celebrating Obama's failures and decrying his successes. And I highly doubt that many conservatives, had Bush been the recipient of such an undeserved honor, would have critical of the decision, as many liberals have been in this case.