Item: The previous administration, by a combination of said "failed" policies, ad-hoc interagency vigilance, and blind luck, succeeded in preventing a planned attack on LAX at the turn of the millennium* -- as well as deterring, evidently, any other such plans that may have then been in the works. The military was not involved in the arrest of the man trying to cross the Canadian border with explosives.
Item: within the past few days, numerous arrests have been made by police in Spain, Morocco, and Germany in connection with the Madrid bombings. In the same time frame, law enforcement has prevented planned devastating bombings in France, England and the Philippines, any one of which would have rivaled what happened in Madrid. Meanwhile, yesterday, a bomb in Iraq killed five more American soldiers.
Item: Osama bin Laden is still at large, probably in Afghanistan, the most successful showcase of the desirability to use war, rather than law enforcement, to capture terrorists.
I'd love to see an actuarial analysis of the cost in dollars (never mind lives) of each terrorist captured or otherwise dealt with by each of these two methods.
In short, my somewhat informed opinion is that by raising al Qaeda to the dignified position of a sovereign state (the only sort of entity against which one can wage an actual, as opposed to a rhetorical or metaphorical, war), BushCo has chosen to swat flies with cannonballs. It's impressive, makes a lot of noise, but by very design is likely to not only be ineffective, but to attract more flies.
* For the purists out there, I know that what was called y2k was not actually the turn of the millennium, but that's a whole 'nother discussion.