Yes and no. DOS shouldn't. The USMC should be guarding our diplomats and as an auxiliary force, our diplomats should be guarding themselves. In an ideal world American diplomats would be able to trade places with any member of the United States Military during wartime. I believe it would assist them in understanding the full scope of the political decisions they are making and or advising. DOS diplomats should put themselves in positions of conflict in order to resolve them, not exacerbate them with excessive security.
Case in point: It has been argued that the DOS willfully misunderstood the dynamics of the Middle East prior to 9-11-2001, to the point of neglect. It could be argued now that the United States Army has had to do diplomacy as well as security in Iraq. To be honest, I don't think Blackwater is helping the DOS do its job, even though it has done exactly what the DOS asked them to do. The job of the DOS is to glue local policy to America's global policy and in the process, keep as many people alive as they can.
As an alternative to what they are doing now for DOS, I would like to see Blackwater working as an auxiliary force for U.S. Special Forces and or protecting sensitive infrastructure in Iraq such as pipelines, power lines and water mains. Each Blackwater employee operating in theater at 400K a year should have between two and twenty Iraqi employees who they live with, train, and if necessary, die with. Right now, the U.S. Military and Diplomatic Corp need qualified counter insurgents and I believe Blackwater could fill some of that need, if asked...
Any job for which you can find a listing in the Yellow Pages should NOT be done by government.
You need security?
Hire a security firm.
US Marines are trained to kill people and break things, NOT to provide security for dignitaries of whatever stripe.