Terrorists might indeed sense it as a sign of weakness, but if we're doing our job, it will be a false weakness. What I am worried about, and what I think Friedman is considering here, is the potential terrorists, people who otherwise may not have joined this cause.
I agree though, it is merely one item, and to what point can we negotiate (in terms of considering or stopping what we do to "create" more terrorists), versus the obvious job #1 of protecting our own? Our support of Israel remains to be the strongest recruiting point, and yet as Darin points out the Palestinians are getting an unbalanced picture as well.
It's not a game of easy answers, not even of making people "disappear."