Was destroying CDS in Greek Bailout 2.0 so smart?

Even the desultory FT has picked up on the financial outrage that was attempted by the Euro Group in their 26/27 October second Greek rescue package; the saga of which still continues this evening in Frankfurt with the IIF. A brief quote:

if the exposures of the large European banks were measured in gross, not net, terms, just how much more vulnerable might they be to sovereign shocks? Or, to put it another way, could the problems now hanging over eurozone banks and bond markets be about to get worse, due to the state of the sovereign CDS sector?