His point was I think that the worst thing that could happen to a terrorist would be if their attack did not gain any attention/notoriety. It's literally worse than death for them. 

In a counter intuitive way that would actually probably curtail attacks because if you couldn't gain notoriety/fame/attention, then there's virtually no incentive to want to it. The object of terror is to (well) terrorize people, if the news media does not take the bait and doesn't give these people a platform, such a tactic loses virtually all of its power. 

That said, practically of course yes, there is no way to keep this stuff secret, but it's an unending cycle now. Someone watching the news is inspired by this and will want to be the next guy on TV. As such you have a cycle where this is in effect normalized. 

Terrorism has killed a comparatively small number of people in the west. It's been used in part to justify a lot of sweeping decisions including, but not limited to;

- The ground invasions of Afghanistan and Iraq, (resulting in the deaths of thousands of coalition forces and tens of thousands of civilian non-combattants)

- The creation of an Executive power allowing the President greater freedom to unilaterally make uses of military force

- The Patriot Act

- The creation of the Department of Homeland Security

- The creation of the TSA and all of the airport goofiness we have to go through now

- Growth in US Defense spending to the tune of hundreds of billions a year

Compare this to the response we see from any of the following:

- Robert Lewis Dear shoots 12 people at a Planned Parenthood in Colorado

- Elliot Rodger shoots 19 in Santa Barbara

- Seung-Hui Cho shoots 56 at Virginia Tech

Okay, now on to the REALLY big stuff

- Drunk drivers kill 10,000 a year in the US

- 20,000 people committ suicide a year using a firearm in the US.

- 10,000+ per year are murded by someone (usually an American) using a firearm in the US.

- half a million people die world-wide from Malaria 

Deaths from terrorism are very sad. We should certainly take stepts to combat it. But for some reason, the items mentioned in the list above don't seem to scare or horrify people in the same way that terrorism does, even though they pose a much greater threat.

Fear of terrorism has led to a scaleback of individual liberties, entire nations choosing irrational fear over compassion, and decades of fighting overseas.

Yeah, just judge a whole religion with over one billion of believers over some terrorists. Good Idea!

Even if the statistics look small in comparison, terrorism is alarmingly becoming more of a problem in western nations. Islamic terrorism wasn't an issue 15 years ago, yet now its almost a monthly occurance in Europe. Of course liberties are going to be rolled back when society as a whole is put at risk. 

It wasn't an issue because they didn't have to make it an issue. They used red-scare tactics instead in order to use authoritarian and imperialist measure.

First it was the British

Then it was the Germans

Then it was the Japanese

Then it was the Soviets

Now it's the Muslims

Instead of censoring terrorist attack news, intelligence services could fake some details to ridicule terrorists dead in the attack.

feels a bit wierd that i thought of walking on that street to the customer i was going to 10ish minutes before it happened.
but was like 'nah.. too crowded on that street' and took sveavägen instead (a parallel street to drottninggatan).

Terrorism isn't a problem in western nations on almost any scale. The only way it's a problem is because the threat it poses is greatly exaggerated. The only threat it poses to western societies is the terror effect itself, which comes from exaggerating the threat. The numbers simply don't lie: The measurable effects of terrorism are very small, and only the psychological factor is actually significant. Of course terrorism is a nasty issue that needs to be fought, but responses to it are greatly exaggerated even though much more serious issues are left with very little attention. For example, offering better care for alcoholism would probably very easily yield much better results in both lives saved and economical impact (because a lot of alcoholists aren't really contributing to the society).

How do you know which religion I'm talking about?

If you meant something else, you chose your words poorly as you must have known how your words will be interpreted.