No, I think the loss is bad for Hughes.
First, I think a rubber match could be a disaster for him. GSP has developed his game to such an extent that I think even Hughes would have a hard time controlling him on the ground. Hughes has poor standup, and if he can't take GSP down (check out GSP's air sprawl - he's ready to defend a takedown) he's going to get rocked again.
Secondly, I was not convinced of Hughes' victory over Penn. I think Hughes lost the first 2 rounds, and then won after Penn separated his rib by slipping out. Even the Trigg victory was a little iffy - I mean he was locked in. If Trigg could've held out he was going to sleep. This isn't knocking Hughes - Hughes is a great fighter who trains well, but he hasn't walked through his last opponents (Excluding Royce who was way too old) with ease. Now he's going to have to come back up through those guys and he may not make it through the gauntlet.
I don't know - I think Matt Hughes trains hard and has shown a heart to win. On the other hand, I think his only real strength is his wrestling. He's a powerful wrestler, but his standup is poor. I really like the champion to be the guy who exemplifies the best in every aspect of the sport. A guy who has mastered standup, wrestling, submissions, training, and who has a class act. Someone like GSP.