You don't think that if it is built, Islamic terrorists will claim it as a great victory of Islam over Christianity, both for the fact of its construction going ahead, despite widespread opposition, and as a monument to the "success" of those who carried out the 9/11 atrocity?
Nobody is denying the fact that right now, given the NYC building code, they may have a legal right to build the mosque near Ground Zero; so it is not a case of prohibiting anything. But since the vast majority of Americans are opposed to its construction, and Imam Feisal Abdul Rauf has been offered compromise alternatives that would alleviate the concerns that have been raised, and be consistent with his stated goal of promoting friendship and understanding, I don't think building the mosque there is the morally right thing to do.
I don't think it's that simple- my guess is that the status quo, anti-American sentiment in places like Afghanistan will continue whether the mosque is built or not. The U.S. Government's decision to rescind Don't Ask, Don't Tell and recognize the basic human rights of everyone, no matter what their sexual orientation is, will more than make up for any political gains made by Americans giving their blessing to the Ground Zero mosque.