Your points are well made, BUT...
There seems to be a perception, particularly in the US, that the conflicts in Iraq and Afghanistan are against an organised organisation of 'Terrorists', and once we've captured or killed all the bad guys (or "kicked their asses"), things will be OK.
I don't subscribe to this. I think (and it is a personal opinion) that fighting them as if it were open war (ie permitting collateral damage and deaths) only begets more 'Terrorists' as people lose brothers, sons, fathers, sisters, mothers and daughters to Coaltion action.
The only way to really stop it is to take away people's reason to fight.