Well I can't say I disagree with "kill them all", but...even incinerating a major city to glowing embers does not take care of the other 99.5% of the potential jihadis out there in a world population of 1.2 billion(?). Respectfully, we're talking about a cult[ure] that glorifies death. And finally, couched as you've stated it, our threatened (or, executed) act of incineration would be one of retaliation, which, by definition, only proves that they are still capable of striking us. If it isn't clear, I'm not claiming to have an answer or alternative at this point. "Kill them all" still works for me, it's just that even a city's worth is far from "all".
Ah but it is a point of deterrent. It is to scare the 'moderate' muslim so that he is far more scared of what we will do than the jihadis. Jihadis might kill him if he doesn't do as they say, but if the 'moderate' thought we would not only kill him but also his family and everyone he ever knew indiscriminantly if the Jihadis go through, we might find that a majority of them really doesn't want to die Jihadi way.
Being the student of Machiavelli, and if the muslim street is going to be controlled by fear (and it certainly will not be controlled by coddling and cowtowing), let it be by a fear greater than jihadis can create. The west *can* create such fear. It's just a question of imagination, capability, and will. We have the imagination and the capability. The will is being constrained by the delusional left.