It handicaps Minnesota moving forward. Microsoft contracts tend to confuse the educated and intimidate the less intelligent in the government market. They constantly preach that the "only" directory that will serve the enterprise needs of the state is Active Directory, and seek to punish the kids who threw together an LDAP solution downloaded from the University of Michigan on Saturday and launched as a comprehensive directory on Wednesday.
We've been anxiously awaiting the Google OS with an eye to purging our offices and labs at my university of our major security hole (converting PC's to alternative OS), but haven't seen much progress. However, we've seen a lot of MS marketing/PR types squiring our networking staff about and tantalizing management with fluffy cloud visions of a Microsoft enterprise. If Minnesota hasn't performed due diligence and made significant changes to the legal documents before signing, then the citizens of Minnesota may find they can't participate in the technology of the future as it won't be permitted under their "agreements" with Redmond.