I had the same visceral reaction to this law as most old-school internet dwellers, but I've changed my tune. My view now:
Yes, it's ridiculous to charge someone money for linking to your content, but it's less ridiculous than the status quo.
We're at a point where foreign corporations are extracting most of the profit from local journalism simply by hosting links to the content, while the people who actually produce that content at considerable expense are going broke. This situation is the result of those foreign corporations building a virtual monopoly on news by out-competing / crowding out all the old places we were exposed to headlines: from newsstands to flipping through the channels to media homepages to RSS feeds.
And sure, hosting links to those news stories is mutually beneficial, except that almost no one clicks the links. The headline, teaser and photo are scraped and displayed on the third party app, and that's all anyone cares to look at. We're all to blame for not clicking, but those same tech companies are especially to blame for fostering this culture of five-second attention spans.
This law will probably not be effective in the short term, and might even backfire due to Facebook's content blackout. It's easy for them to give the middle finger to small markets like Australia and Canada.
But major players like California are considering similar laws, and you can bet Facebook will suddenly find they can pay content producers when the alternative is losing the world's fifth largest economy.