Now, this is quite right. Portraying a few renegade members of the military is not an insult to the military, any more than portraying, say, a dentist or a magazine editor as a murderer in a Castle episode is an insult to the professions of dentistry or editing. It's the individuals that are to blame, not their organizations.
Well, based on that, then portraying an Islamic terrorist shouldn't be a problem.
Re your earlier thoughts that it'd be okay if a balanced view is shown, i.e. also showing good
members of whatever ethnic/religious/national group is cast as a bad guy - is it really a good idea to place such a restriction or rule on entertainment? It smacks of - well, I guess censorship isn't the right word. Some of the best entertainment is entertainment that follows no rules, that dares to show its ass at convention and propriety and rules. I'd hate to see an author constrained by, say, an editor or studio demanding certain plot points be included or eliminated just so some hypothetical people aren't offended. There's been way too much of that, IMHO, these days. It's a definition of PC - now, as a friend of mine (who happened to be an very liberal wromagazine writer) once said, there's good PC that makes sense, and there's "enough already!" PC. That seems to be the latter, to me anyway.
It's one thing if you choose
to write a story including a carefully balanced group of characters that softens offensive ones. But do you want to HAVE to?