Obviously the media is constantly looking for sensationalism for their precious ratings. This is the cause for most public misconceptions, and is fed by the fact that fiction often makes for a better story than fact. The Government's motivation isn't quite so obvious. I think the main source of the problem is people who don't want to lose their jobs. If you are the head of a government department who is losing funding and purpose it's understandable that you will start looking for things to do.
Terrorism seems to be the latest hip trend.
After all, everyone would be for defending against anything that could threaten his or her children. Keeping people employed is certainly noble, but our government's resources could be used to address more pressing problems. A paranoid government is a dangerous thing. I have always thought that the government would eventually come to something of an Orwellian state, and that terrorist threats were a realistic justification. I'm starting to see confirmation of this theory.