Good piece! I think part of the problem though is the Coalition of the Willing's conception of the battle. I firmly believe that the phraseology 'War on Terror' is misleading. As one academic (I forget his name) has noted 'terror' is the enemy's means, not the enemy himself. Its like WW2 being declared as a 'War on Panzers'. Furthermore, no matter what we do, there will always be a few terrorists out to harm liberal democracies. The 'War on Terror' in its current framework will thus be neverending!
I think that the threat should be regarded, as with terrorism in the past, a police matter. These Muslim fundamentalists that attack on Western soil are criminals, not soldiers. I honestly don't believe that liberal states are in danger of falling to these radicals. Anarchists have launched similar (though on a smaller scale) bomb attacks in the past that have fizzled out. The minute that any terrorist group organizes itself into an armed conventional force in Western countries, it will be defeated quite easily. There were arguably more Islamic terrorist attacks in the West etc in the 1970s than there are today. Yet we do not regard this period as a fundamental shift in world politics, like we did after 9/11.