I would not declare the entire religion of Islam a terrorist organization. My reasons are mostly (but not exclusively) pragmatic.
Islam is an expansionist religion. Part of its doctrine is imposing itself on "unbelieving" parts of the world. One of the ways it does this is through terrorism. Now, some muslims say that the terrorism is merely a reaction to western oppression. This is nonsense; there isn't even a shred of truth in that belief. But, some of the young muslims they recruit believe this. The leaders do not believe this, but they may say they do to convince western fools that the problem of terrorism can be blamed on the west.
Terrorism today is excusively Islamic. If there is at this time any other type of terrorism, it is probably between small ethnic communities in parts of the world that I've never heard of, and it's probably based around small land disputes. The point is, that terrorism today is an Islamic act, so much so that I could say that it is a form of muslim cultural expression. Italians play soccer and write operas, the French like to paint and cook, the Jews think and create, the Japanese preoccupy themselves with technology, and muslims like to blow things up.
So why would I be reluctant to label Islam a terrorist organization? Well, first of all, not all muslims are terrorists. There are backward muslims who by their own situation can do nothing but try to provide for their families. They have no sense of the outside world. They wouldn't know a Jew if they fell over one. I think of these people like I would think of people from the middle ages. They are born, live, work, and die anonymously. They happen to be muslim as an accident of their birth. They don't go to the mosque. There probably isn't even a mosque within three days of travel by foot. They present absolutely no threat. In our lives, we will not hear or see of them and they won't hear or see us. I think that this group of people represents a good part of the 1 billion muslims in the world. They are backwards and pathetic, but they are not terrorists.
Now, you can point out (rightly) to me that the question was not whether all muslims are terrorists, but whether Islam (the belief system and those who practice it) should be declared a terrorist organization. I still don't think so. It is impractical to think so and I'll tell you why. What do we want to do with terrorist organizations such as the muslim brotherhood, al qaeda, hamas, hezbolla etc.? We want to annihilate them, because they have declared war on us. What about those practicing muslims, who believe what the Quran says, who hate America, Israel, and the West, who cheer in the streets when there is a terrorist attack, but are not actually members of one of these islamic terrorist groups? Do we want to annihilate them? First of all, it would be impossible to annihilate them. There are too many of them. Second of all, would it be right to annihilate them? I'm not so sure. They were bred in an environment of hatred. They've been brainwashed all of their lives. Most are too weak-minded to recognize the evil of their belief system. I don't think that they should be destroyed. Walid Shoebat is a good example of this. He was an Arab terrorist, who had a strong enough mind to recognize what was wrong with his belief system that he made a change. People like him will do more to end terrorism than we will.
I think what needs to be done is to destroy the recognizable terrorist infrustructure. Eliminate all of those groups. Then eliminate the spiritual leaders of Islam. Bomb Iran. Depose the Saudi rulers. MAKE OIL WORTHLESS! Eliminate Islamic content in their education systems. Destroy the mosques. Create a spiritual and ethical vacuum in these countries. Once these countries are safe, send in hundreds of thousand of Christian missionaries to fill that vacuum with something good. Set up capitalist enterprises in these countries. Make the world safe for Wal-mart.
I know that this sounds impossible, but I put it to you that trying to win a war against 1 billion people is more impossible. Uproot the tree of Islam, cut off the branches, and transplant those branches onto a healthy tree.