It's not surprising that this woudl have been overturned on appeal.
The Supreme Court recently rules (last month) I believe that 10 commandements monuments inside courthouses in Kentucky were in fact unconstitutional, BUT they did allow a similar monument in Texas, because it had been in a location for over 40 years and was on the grounds, not inside the courthosue IIRC - so I guess it was kind of like "In God We Trust" on the money - okay because of the historical context.
Since this particular case was about a monument in an innocuous position, and had been there for 40 years as well - I'm not surprised it was overturned on appeal.
(In fact, had the Kentucky and Texas decisions been sooner - the ACLU might not even have bothered filing this case, because it is so similar to the Texas case).