But you also seem to assume that all such interaction are taking place under natural conditions (humans are just a passive agent, one of the mammalian species, like a cow perhaps). In reality though humans are actively manipulating this virus in a laboratory environment and are able to select strains that are deadly enough, but not too deadly, also transmittable enough. That is the real danger I think.
> Why? Well, certainly a large portion of the human population that had become exposed but had not died were now immune.
What if you or your family isn't. Are you willing to brave on a new hardened strain of avian flu just to find out. Would you soldier on with a stoic face? Nobody would right? Therefore the panic. So this is another side of the issue. Humans are going to react to the disease not just in a sort of automatic biological way but in a proactive way. Close borders if they can, quarantine and so on.
> Viruses that kill quickly and efficiently do not spread as well as those that cause some disease but allow their host to continue functioning more or less normally
I think again, you are assuming a naturally evolving environment outside of human activity. With plane travel for example, and ever larger densities of population centers, the same assumptions about the rate of spreading of a virus cannot be made as they would have been 100 years ago. (On the other side there is the pro-active element of having access to quicker and better information, so which one will win -- quick information that could be used to establish quarantine zones for example or the disease carried by fast traveling passengers? But that is a whole other discussion).
> bioweapons are only ever considered as denial-of-area or knock-down agents.
I don't think that angle was assumed as much as some ideological angle of depopulating the planet, by a lone extremist, for example. Here is an example profile: a virologist at some research facility who has strong beliefs about the world reaching a tipping point as far as natural resources are concerned vis-a-vis he accelerating increase in population, becomes obsessed with the idea, that de-population has to take place and they are willing to actively encourage it. They start the process of cultivating a strain of flu. When finished they travel to another continent and try to find ways to spread it.