To be sure, there are bad unions -- or, more strictly, bad union executives. A weak executive is easily exploited by canny university negotiators, leaving grad students with a choice between a bad contract and a contentious strike. This suggests that unionized grad students, as with unionized workers of any stripe, need to keep an eye on what their executive is actually doing. And, when the executive goes wrong, it is up to the membership to yank them back into line. On the whole, though, unionization is really the best option for protecting grad student workers at universities. The alternatives, after all, are a toothless collective group (only a union has the legal right to strike) or individual departmental negotiation (which would leave grad students in more cash-poor departments vulnerable to loss of funding, and grads in more student-heavy departments trying to bear impossible teaching loads). So, what's the problem?
As I see it, there are two serious objections made against grad student unions. The first is that it allows the administration to treat grads as instructors first and students second, giving grads even less time and ability to fulfill the student role. While this is probably somewhat true, in my experience, a union limits the time that one can be compelled to work, thus forcing the university to either hire more instructors or pay the instructors it has more in order to cover the shortfall. Moreover, it's simply naive to think that contemporary universities wouldn't use grads as cheap labour anyway. Thus,
The second is that grad students are not employees, but apprentices, and hence should not be represented by unions. This is a distinction without a difference. An apprentice is a form of employee, who performs simple tasks in a field (and with supervision) while being trained for performing more advanced ones (and without supervision). Put simply, as long as grad students are actually providing instruction, then grad students are being employed as instructors, and deserve protection in order to prevent exploitation by university administration.