If there was any goal in state-level politics that would justify weird abuses of power, I think trying to dislodge State Senate President Joseph Bruno from authority in Albany might just be it. New York State politics is, in general, just horrible beyond belief, featuring all kinds of shady deals, near-dictatorial authority in the hands of the bosses, etc., etc., etc.
That said, Elliot Spitzer's really gotten himself covered in muck here. I'm not sure it's quite right to draw a parallel between the privilege claims Spitzer is asserting and the ones Bush is asserting, since it's entirely possible that New York State law is legitimately different from federal law on this score, but the underlying conduct that prompted the investigation Spitzer is stonewalling is ridiculous.
Basically, Spitzer directed the State Police to go investigate Bruno in hopes of digging up dirt that could be used against him in order to help the governor gain leverage in their political battles. Precisely the reason why I get upset about things like, massive illegal secret surveillance programs, is that they're prone to just this sort of abuse. It's just really, really egregious behavior.