The author contradicts himself in speaking of the insurgents "declining ability to produce and employ IED's" while at the same time noting a "considerable uptick" in IED attacks in 2006 compared to 2005. It seems to me that both things can't be true. Perhaps I'm missing something here.
You missed nothing, but, honestly, why did you expect clear thinking from an author who doesn't know the difference between "loosing" and "losing?"
No, the point is they are having to launch more and more attacks for less and less results. It would be as if it took more shells fired to achieve still fewer hits.