I talked with my buddy again today and he offered a bit more insight. Before the war, America was like the boogey man - the US military threat was not completely understood, so we gained an advantage through fear of the unknown. But now [though I say incorrectly so] it is perceived that the US military has shown its stuff along with its limits. It is now perceived that we can be managed.
Until now, Bush has had virtually unlimited control and funds to fight his war, and he has created a disaster with us stuck in the middle and no clear way out. What the enemy doesn't understand is that we are fighting a limited war without a draft, and a war that only places demands on a vanishingly small segment of the US population, so as I have argued before, if push came to shove, they ain't seen nothin yet. But most war supporters don't want a draft and we don't want to use nukes, so, we lose; 3000+ dead Americans lose, tens of thousands of injured vets lose, the US military is greatly damaged, US prestige is lost, the Iraqi people lose, we each send uncle Sam about $2000 [minimum] for the trouble, and the bees win.