The last time the U.S. Supreme Court examined a statute similar to the Religious Land Use and Institutionalized Persons Act (that it upheld today) was in 1997 in City of Boerne v. Flores. There the Court found that the broader Religious Freedom Restoration Act exceeded Congress' legislative powers. Congress had relied on Section 5 of the 14th Amendment in enacting that law.
RLUIPA is narrower, and relies on Congress' commerce and spending powers. The prisoner provisions in Sec. 3 are limited:
"(b) SCOPE OF APPLICATION- This section applies in any case in which--
(1) the substantial burden is imposed in a program or activity that receives Federal financial assistance; or
(2) the substantial burden affects, or removal of that substantial burden would affect, commerce with foreign nations, among the several States, or with Indian tribes. "
Here is what Justice Ginsberg had to say in footnote 7 about the federalism issues in today's case, Cutter v. Wilkinson:
"Respondents argued below that RLUIPA exceeds Congress' legislative powers under the Spending and Commerce Clauses and violates the Tenth Amendment. The District Court rejected respondents' challenges under the Spending Clause... and the Tenth Amendment..., and declined to reach the Commerce Clause question.... The Sixth Circuit, having determined that RLUIPA violates the Establishment Clause, did not rule on respondents' further arguments.... Respondents renew those arguments in this Court. They also augment their federalism-based or residual-powers contentions by asserting that, in the space between the Free Exercise and Establishment Clauses, the States' choices are not subject to congressional oversight.... Because these defensive pleas were not addressed by the Court of Appeals, and mindful that we are a court of review, not of first view, we do not consider them here.... But cf. post, at 1-2, n. 2 (THOMAS, J., concurring)."
So there may still be another round in the battle over RLUIPA.