I wouldn't say that there has been (yet) a completely unreasonable hysteria panic reaction amongst the American public, and I don't think the Bushies are that extreme.
I live here in Washington DC area and I don't see that things have gotten out of hand.
For examples of that, think back to the internment of Japanese Americans in WWII. Or the communist panic of the 50's and early 60's.
If I were a muslim in America I would feel differently I am sure.
I do not see that "real security" is compatible with the American values of freedom, and I think that at this point perhaps most lawmakers and the American public would agree.
People realize the Big Lie -- that government will protect them -- even if they pretend they don't.
I believe (perhaps naively) they will not be willing to pay the price of their freedom and liberty to continue this Lie. They will learn to live with the occasional terrorist act, just as they live with the occasional robbery, burglary or murder. We aren't going to see the entire fabric of the constitution irrevocably ripped up over it.