It isn't about policy, it's about pride. Or as it's known in the Christian world, the sin of pride, and the self-deceptions, the paranoid fantasies that whole peoples will adopt in order to save face in the face of cultural change.
Cultural change is the inevitable result of globalization bringing cultures into such close contact that they interpenetrate: people from different cultures are trying to live on each other's turf. And the cultures that are dying are the old honor/shame cultures of northern Africa, the Middle East, and Central Asia that date from the Time of Ignorance before the coming of Islam.
To be respected in a traditional honor/shame culture, you must know more than your children. You must force all your family members to retain the details of your cultural dress and lifestyle, because the source of your honor is adherence to the code of honor that prescribes that dress and lifestyle, and any other choices they might make reflect badly on you. Yet you are surrounded by media which your kids are more savvy at using than you are, and it carries appealing images of alternative dress and lifestyles. You almost begin to feel like a left-behind loser with a rag on your head.
But, wait! There's a quick fix! A paranoid fantasy that makes the surrounding culture evil and you good. The other culture consists of devils who are attacking your religion! You are good and wise, they are depraved. But they are winning, and must be stopped! KILL THEM!!!!!
See? You're feeling better (meaning superior in an honor/shame culture) already. Never mind that Islam is universal and transcends culture, never mind that Islam as a religion is almost nowhere under attack, and that with over a billion adherents, shows no sign of going away.
Now once you've adopted the paranoid fantasy, all you need do is twist any facts you can into supporting your fantasy, and disregard those you can't. This is the dynamic behind the film, "Valley of the Wolves," in Turkey, for example. The film purports to be a documentary and depicts the current Iraq conflict as what yesterday's Wall Street Journal calls, "an organ-harvesting operation run by greedy Jews and fundamentalist Christians."
Unfortunately for us, the paranoid fantasists will think what they want to think and do whatever they can to inflict mega-violence on all their designated enemies, regardless of any of our words or actions. But fortunately for us, their cause is already lost, partly because their culture is simply not competitive, and partly because their ideology is rooted in idolatry and blasphemy. Idolatry because they imagine that God is as wedded to their culture as they are, and blasphemy because they impute their own rage (and evil intent) to God.
So have a good look at the picture above. These are the faces of the defeated, but they are not going down without a fight (even a nuclear one, if they can get the wherewithal). The pity is that the fight is unnecessary: nobody is insulting Islam (because in modern culture it is meaningless to try to insult a revealed religion), nobody is even insulting them, because we're all too politically correct to do that. It's just that they feel insulted (dishonored, shamed), because the surrounding culture does not afford them honor in their traditional ways of getting it. Rather than open their minds and hearts to new ways of being Muslim, they trap themselves into thinking that they must subjugate the rest of us, or live with dishonor.
Finally, contrast their behavior with that of the surrounding culture. People like those in the photo rioted over the "Muhammad" cartoons, because they feel genuinely (culturally) threatened. If the British were as touchy, they would have responded to the above provocation with riots and mass deportations. But they can afford to be less touchy, because their cultural identity and sense of self-worth is not threatened. They know that ultimately, it just doesn't matter what these people think.