In all honesty, there isn’t much that’s new here about using Space Invaders and unwinnable games as commentary (heck, I did it myself). The only new addition here is use of the WTC as the battleground and the scale, if the image is any indication (though I’d argue Commandopede already explored large-screen displays :P).
However, I’m not convinced that the ‘Invaders’ anacronym is the correct metaphor. It wasn’t an ‘invasion’ but a dastardly terrorist attack and it came from suicide flyers who had hijacked planes rather than massed troop wave attacks (cannon fodder). Space Invaders has traditionally been used to comment on immigration and unwinnable battles rather than terrorism. Perhaps Defender would have been a better commentary, particularly since it includes hijacking ‘humanoids’ to create kamikaze aliens? I doubt Eugene Jarvis would care (though Midway might).
I also don’t agree with Taito’s possible decision to censor the exhibit and think it spells trouble for the game art movement. This would mean big trouble for other artists wanting to use game characters. If this happens, what’s to stop Nintendo from suing I Am 8-Bit artists over using Mario characters in sexual and violence commentary? ESPECIALLY since it’s a one-of-a-kind piece that’s not being sold. That sounds like fair use to me (but I doubt you’ll convince Disney or Fox…).