Costanza comments on Offense versus harm minimization - Less Wrong
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Status games. There's a satirical blog which addresses this, at least in the context of Western sophisticates:
ETA: In the context of Islamic reaction to the Mohammed cartoons as well as the burning of a Koran, there may be some value for a demogogue to conjure up atrocities by some demonized enemy in order to unite his (and in this case, it will be "his") followers. Westerners have done the same sorts of things as well, most obviously in wartime propaganda.