If we were terrorized, we would not fly by the millions... every day!
I won't get into the civil liberties topic. There are trade-offs we will all never agree on. One of those is security v. liberties. So everyone just tug their way and we'll see where we end up.
My view of it is that humans routinely miscalculate risk and behave quite irrationally from a risk-minimization perspective. At the same time, a public that is largely apathetic about politics in general is easily moved by fear-mongering, us-vs-them rhetoric, etc. -- like any fad, terrorism simply captures the imagination of some people.
Attempts to stop the overreaction suffer from the typical challenge: the majority who don't care about terrorism care about the issue less than the vocal minority for whom it's a very big (as in scary or as in profitable) deal.
Also, due to the government's habit of paying for terrorism prevention, the typical corruption/overspending problems happen far more easily than they would in a decentralized system. And, due to the political nature of terrorism prevention, our leaders work to minimize the extent to which they would likely be blamed for an attack rather than working to make us feel/be safer.
But I edited my post because statistically the majority of us are not afraid. We care, and definitely vote for leaders who refuse to terrorize us a la Cheney, but we know we have to adapt our way of life to minimize the risks--which can be confused with fear, but is actually the rational thing to do, since we're dealing with irrational people.
I was too succinct, but yes the majority needs to do a better job of controlling the message we send to terrorists--that I should have conceded.