I think a big issue is selective enforcement. If the law isn't going to be enforced it shouldn't be there, not ignored. Why i it ok for someone to be in this country illegally, but it isn't ok for a legal, otherwise law abiding citizens get harassed to no end if they don't pay taxes? Obviously a bit rhetorical, but if a law won't be enforced it is an expense, a burden and a blemish on an already over-legislated government.
Want smaller government? Find better ways to deal with immigrants than making them illegal and wasting taxpayer dollars...