Others have pointed out that this makes Arizona a "show me your papers" state, with an eerie similarity to every movie about Nazi Germany you've ever seen.
To me, it harks back to the old vagrancy laws of the Depression Era. Corporate farms put out calls for migrant labor, and essentially every worker who came could be arrested simply for being poor and on the move. But since the big farms depended on the cheap migrant labor, the laws were applied selectively. Any worker that spoke up for a raise or for better conditions in the fields or, God forbid, organized with other workers for the same would probably be arrested for vagrancy.
So the cops and the corporate and political elite that controlled them claimed for themselves sweeping powers to harass working people whenever it suited them. An added bonus in this conservative feedback loop was that the laws implicitly made an entire class of workers, the migrants, seem like the enemy of another class of workers, the natives.
Wait, are we describing the American West in the 1930s or Arizona in 2010? If you're like me, you've lost track.