FWIW (not much 😀 ), I think that they truth is somewhere between the to positions, I think that governments have greatly exasperated the threat to pass legislation & justify the normally unacceptable, and also as a diversion from other sticky issues (like the economy). It seems to me that GW Bush was totally into all this, and that Blair went along with it.
Reminds me of this poster:
I also feel that there are those in large business that are good at manipulating the potential threats to sell product (ID cards, body scanners…)
However, I do know that there are real threats too, and my family has been on the receiving end of terrorism. So, IMHO the threat is real, but not actually anything like as large as the TV & press coverage would make us think.
I also feel that the only way to resolve these issues is for the belligerents to talk. It seems to me that it is impossible to “fight terrorism”, instead you have to settle to disputes, and learn to live with one another. I guess Northern Ireland is a good example of this approach.