"then what was the point of the bailout if AIG could have just told its counterparties to take a hike?"

Exactly. This is the point.

The bailout of AIG is just a rape of the American taxpayer. It doesn't solve anything, promote anything, or otherwise add value in any way.

The existence of all these obligations is the RESULT of Bush's deliberate lack of regulation of Wall Street. Obama's added 200B to the bailout cost; Bush spent over $1.3 Trillion.

Of course 100% of the AIG contracts could be unwound - signing a contract you know you can't pay is FRAUD. .Gov could declare the contracts null and void - but they won't.