Let's play hypothetical.
You, Balrahd, have a sister. She is married. He's a cop. But he's also a drunk, he has a volatile temper, he threatens to kill his wife (or ex-wife, whatever), his kids, even his wife's dad (who would in turn be your father), tasers his own kid, and is a general mess in the crap he tries to pull off. I'd wager that you probably can't stand the guy, much less the fact that he represents the law as an officer.
Would you, as some type of DA or someone with some jurisdiction, not try pretty dang hard to get this guy fired? You have the ability to remove the sheriff of his office so you press and press him to get rid of your brother-in-law. But he won't (knowledge gap here because we don't know why, in the Palin story, Monegan won't do anything). So you fire the sheriff. You have that right at any time to do such, but you're only doing it to make a point. Yah, that's a pretty hard line to set but you feel it is worth it to eventually do the right thing. Keep in mind, you have that privilege explicitly set by the law, you can remove certain figureheads at any time.
What would you do? If I felt it was a legimate concern to deal with and was mishandled in the past because of a buddy-buddy system, I'd probably be infuriated and look to deal with it however I could.
I think that Palin obviously overextended herself in this but it's not near as big a deal as you want to make it out to be. No, I'm not scared of 'President Palin'. Proper channels? Sure, those exist and should be followed. I'm not going to apologize, I think she made a mistake. But please allow me to also say...big deal.
Finding Number One
For the reasons explained in section IV of this report, I find that Governor Sarah Palin abused her power by violating Alaska Statute 39.52.110(a) of the Alaska Executive Branch Ethics Act. Alaska Statute 39.52.110(a) provides
The legislature reaffirms that each public officer holds office as a public trust, and any effort to benefit a personal or financial interest through official action is a violation of that trust.
Finding Number Two
I find that, although Walt Monegan's refusal to fire Trooper Michael Wooten was not the sole reason he was fired by Governor Sarah Palin, it was likely a contributing factor to his termination as Commissioner of Public Safety. In spite of that, Governor Palin's firing of Commissioner Monegan was a proper and lawful exercise of her constitutional and statutory authority to hire and fire executive branch department heads.