Was Erie Wrongly Decided?

Here's a question that keeps me up at night, especially when, as now, I'm teaching the morass of products liability law: Was Erie Railroad Co. v. Tomkins--one of the most celebrated cases of the twentieth century--wrongly decided (or if it's now too well-settled to call into doubt, should we regret that)? Michael Greve puts the question back on the table with his new book The Upside-Down Constitution (Harvard, 2012) and has a short blog post about the argument here with the promise of more to come. Apart from the concerns about Erie's effects on federalism that Greve raises in his book, there are also passages in Justice Brandeis's opinion (here quoting Justice Holmes in his dissent in Black & White Taxicab Co. v. Brown & Yellow Taxicab Co.) that I should think have to chafe the sensibilities of anyone sympathetic to the Catholic legal tradition:

The doctrine [of Swift v. Tyson] rests upon the assumption that there is "a transcendental body of law outside of any particular State but obligatory within it unless and until changed by statute," that federal courts have the power to use their judgment as to what the rules of common law are, and that, in the federal courts, "the parties are entitled to an independent judgment on matters of general law":

"but law in the sense in which courts speak of it today does not exist without some definite authority behind it. The common law so far as it is enforced in a State, whether called common law or not, is not the common law generally, but the law of that State existing by the authority of that State without regard to what it may have been in England or anywhere else. . . ."

"the authority and only authority is the State, and, if that be so, the voice adopted by the State as its own [whether it be of its Legislature or of its Supreme Court] should utter the last word."

Erie Railroad Co. v. Tomkins, 304 U.S. 64, 79 (1938) (omission and second alteration in original).