But it's gone way to far in the other direction, the Taliban know there's isn't much we can do against them. In the end, people will side with whoever they perceive as being stronger and will be around longer.
To Monte's point, securing the civilian population is part of the counter-insurgency strategy and seems to have been successful in Iraq. We do need to deal with Iran and Pakistan problem to have a chance of success though.
Edit: Here's a pretty interesting article on the new situation: http://news.yahoo.com/s/time/0859919992510...W1hcGV0cmFldQ--