Errrr, the problem is real and I believe the explosive they are looking for is nitroglycerine, as used in the Bojinka plot. I watched a documentary on TV on this last year and saw the (ghastly) devastating effect on the Japanese passenger who was unfortunate to occupy the seat above the bomb, which was assembled in the cabin out of plastic bottle of liquid explosive, detonator and an electronic watch. The only reason the plane didnt go down was because the bomber didn't use enough explosive.
I don't believe there is a simple solution to this threat nor are the authorities overreacting.