This is a variation of MAD (Mutually Assured Destruction). The reason that the US and the USSR kept the peace so long was the knowledge that neither side would survive a conflict. In this version Iran would be constrained from ever using its nuclear arsenal (once it creates one) by the knowledge that we would retaliate for any first strikes that they make.
This is the best way to preserve peace - make war too expensive.
NATO existed largely for this reason and it has been the policy of the US for both parties since the USSR exploded its first atomic bomb.
So why if Obama denouncing it? In a statement he said:
It's not the language we need right now, and I think it's language reflective of George Bush" akin to "bluster and saber rattling.This comes pretty close to saying that Obama would not retaliate if Israel was attacked. Does he really mean to declare open season on Israel?
Once again, Obama's desire for a "new way" in politics threatens to undermine US policy.