It's a passage that has some important lessons for Christians today. Many mostly-sound evangelical leaders are currently telling us we need to seek a kind of pragmatic co-belligerency with people who deny the principle of sola fide, in order to win the supposedly all-important moral crusade currently being waged by the religious right. That's similar to the approach Peter seems to have taken with the Judaizers. Paul, on the other hand, clearly regarded every kind of tolerance toward the Judaizers as a sinful act of participation in their evil deeds (cf. also 2 John 7-11).
Anyway, in the process of my study, I came across this quote from J. Gresham Machen's Christianity and Liberalism. It was written more than 80 years ago. Machen could not have foreseen how popular it would become for evangelicals to turn aside from the gospel in favor of political causes. But Machen's words say precisely what most evangelicals in 2005 desperately need to hear and come to grips with:
What a splendid cleaning up of the Gentile cities it would have been if the Judaizers had succeeded in extending to those cities the observance of the Mosaic law... Surely Paul ought to have made common cause with teachers who were so nearly in agreement with him; surely he ought to have applied to them the great principle of Christian unity.
As a matter of fact, however, Paul did nothing of the kind; and only because he (and others) did nothing of the kind does the Christian church exist today. Paul saw very clearly that the difference between the Judaizers and himself was the difference between two entirely distinct types of religion; it was the difference between a religion of merit and a religion of grace. If Christ provides only part of our salvation, leaving us to provide the rest, then we are still hopeless under the load of sin. For no matter how small the gap that must be bridged before salvation can be attained, the awakening conscience sees clearly that our wretched attempt at goodness is insufficient even to bridge that gap. The guilty soul enters again into the hopeless reckoning with God, to determine whether we have really done our part. And thus we groan again under the bondage of the law. Such an attempt to piece out the work of Christ by our own merit, Paul saw clearly, is the very essence of unbelief; Christ will do everything or nothing, and the only hope is to throw ourselves unreservedly on His mercy and trust in Him for all.
Paul certainly was right. The difference which divided him from the Judaizers was no mere theological subtlety, but concerned the very heart and core of the religion of Christ.