Mr. Krauthammer seems to not know what sacred means. Rather, he shows the all too natural human tendency to deify one's own group, this is similar to when we anthropomorphize what is dear to us. According to both the Old and New Testaments, only God is holy and thus only He declares what is sacred. If we were to put this in modern jargon we would say that only God can say what is special. Everything else is profane, including us and all of our endeavors.
The human tendency to try to do God's job of declaring what is sacred is sometimes used to maintain one's superiority over others and that is what Mr. Krauthammer et. al. are doing here. In the land of religious liberty, these conservatives are calling for an exception to the amendment guaranteeing this liberty because who would be exercising this liberty are Muslims--see the above implication.
In addition, the conservative logic here has another problem because it pits a "sacred" place vs a "sacred" document: Ground Zero vs the First Amendment. And to conservatives like Krauthammer, the winner is obvious. The problem for the rest of us is that this puts the Constitution in the loser's bracket where we would have to speculate what else could beat it and thus what liberties do we have left.
So Krauthammer suggests that if the Islamic religious center is built anywhere else, there would be no problems. And we could believe him unless we watched a recent episode of the Daily Show where Americans were protesting the building of mosques in Tennessee, Wisconsin, and California.
If we would keep to the rule that only God determines what is sacred, then, perhaps, we would stop trying to use religious language to declare our own superiority over others. If only God determines what is sacred, perhaps we would truly regard all others as equals. If only God determines what is Sacred, perhaps we would be better people who have a realistic chance at making peace than being those bent on committing global suicide through war. If only God determined what is sacred.