The problem is that in addition to bringing "justice" to the perpetrators of the crime, it is also desirable to give others a reason to not carry out further similiar crimes. The balancing act is thus - How do we make the punishment suitable to act as both punishment and deterrent without losing our own humanity?
It may boil down to a case of "might makes right", in the same sense that a man getting bitten by a snake might kill the snake and burn the field where the snake came from in order to kill all the other snakes. Appeasement does not work, evidenced by repeated terrorist acts in Russia, the 9-11 attacks, and every other act of escalated terrorism dating back to before the Munich hostage event. Nuking them all is the other extreme and we haven't been pushed hard enough to resort to that solution. What middle ground will give us our 3 desired outcomes - maintain our own moral legitimacy, administer "justice" to the criminal terrorists, and still provide a deterrent against future acts?
I don't take to blackmail well and if the blackmail involves the threat of, or actual use of, lethal force, then my personal inclination is to respond with lethal overwhelming pre-emptive force to prevent a single loss on "my side". But I'm sure that's because I grew up in America where in the past, the weak and indecisive appeasers tended to get killed off before they had a chance to rethink their pacifist position. I'm sure some others in more stable areas of Europe would rather absorb a few dozen or hundred losses on occasion to avoid the upheaval a true solution would require. I just wasn't brought up to consider any losses acceptable. Come to my town and kill someone, and I just might get a bunch of friends and visit your town in order to ensure that the perpetrator and those who would repeat his actions will never ever have the opportunity to come back to my town.
And then we'll wire the place with cable and send in our cultural WMDs... Weapons of Mass Disney. That'll show them.
