Assuming the feds had done right and let AIG go under (its error one of failing to hedge its exposure to CDSs), those in need of credit default insurance could have simply taken their business to other financial companies ready and willing to provide what AIG no longer could.
In fact, most of the highly precautionary laws and regulations currently on the books include some form of risk assessment that error on the side of caution, building in a host of safety factors that substantially overestimate exposure to justify regulatory actions that may not be necessary.