You have it backwards Glueball. If suicide bombers are the problen then effective Air Marshals are even more important on the aircraft. A suicide bomber, an individual, is going to try to take over the aircraft or at least advertise his presence before blowing himself up. Otherwise the bomb could just as easily be put in the cargo as you mentioned.
The time when the terrorist announces his intention to the World in order to publicise his beliefs is the time when an Air Marshal would have a chance to intervene. There will be a delay between the time the terrorist announces his intent and the time he pulls the pin. The terrorist needs this time and will manipulate it to get maximum publicity. That's the time to act and only an armed person on the aircraft can intervene. (Unless you prefer to have yourself shot down rather than blown up).
As you correctly state the cargo hold, and other areas of the aircraft, are totally vulnerable. The business and political pressures of the industry will probably make this problem insurmountable. What we have now is airlines in poor financial shape and not willing to pay for effective security. We have enormously expensive government security measures being put into operation with no end in sight as to the final cost of the system. The airlines employ any labour that they can get, regardless of background, as long as they are cheap. The protections against employing "unfriendly" individuals are very minor. Basically, the whole problem of "rampside" security has yet to be approached with anything like the intensity applied to "passenger side" security and in many ways it is a far tougher problem.
What we are seeing is a falling airline business which is resulting in a reduction of the number of airline flights and reduced numbers of passengers while the cost of moving those passengers increases astronomically.
There is a total disconnect in reality. For example, UAL looks as though it will be turned down for 1.8 B$ of loan guarantees - not cash- loan guarantees. Meanwhile the government is spending an extra 5.1B$ - in cash- to maintain the security services.
At some point here there will have to be a cost/benefit analysis. How much taxpayer money can the government commit to provide very expensive services to a relatively small part of the population (For example, would more lives be saved each year by putting the same money into improved health care?). Unfortunately, what appeared to be a reasonable response to Sept. 11 has become an economic and political nightmare. No politician is going to back away from a commitment to US national security but no politician realised how expensive the final cost would be. How long will the population put up with paying extra taxes that only benefit air travellers? How big will the US federal deficit be allowed to grow in the name of security before (including various wars as well as homeland security) before it causes national, international, economic problems?
If the general health of the airline industry does not improve we will just about finish putting the last security screener in position as the last airline goes bankrupt.