How ironic is that, because if it is, it would undermine one of the greatest achievements that Americans like to attribute to their country. Will this act from Obama cause Americans to rewrite their history books about who invented the Airplane, since the Brazilian Alberto Santos-Dumont filed first: http://en.wikipedia.org/wiki/Santos-Dumont_14-bis ?
Before Americans start to bash me, I would suggest them read this article: http://www.airshowfan.com/first-airplane.htm

More importantly, as you pointed out before, smaller companies have the ability to reduce costs, particularly administrative costs. The thing that makes bigger companies inefficient is the administrative bloat. People like to deride NASA about cost bloats (with some reason), but private is not necessarily leaner. If one has ever worked for a large company like HP, Dell or IBM (I only have experience with computer companies, but I think this apply to other giants), the admin bloat is just as bad.

Besides the embarrassment to the government, which might be something most Americans will not care, one bad consequence for the general American public is that this undermines the credibility of American extradition requests, providing reasons for other countries to deny extradition requests, even in cases where the extradition might have been a fair one, e.g. a divorcee parent kidnapping a child to another country, white collar criminals escaping prosecution (assuming those are even prosecuted :-D), common criminals abroad, etc.

I'm gonna build my own Internet, with Blackjack and Hookers. In fact, forget the Internet.

I feel really sorry for you if you have made this interpretation about my comment, despite all my explanations to ignore the politics of the matter. At no point in my comment did I make a judgement of value on Israel, nor did I state anything that was not factually true. I did not make a value judgement on the Israeli position to withhold tax money from the PA, but I did state that a logical consequence of this decision is that Palestinian Universities would likely be affected by their government collecting less money.
Of course it is hard to separate politics from everything else in this region, but my argument was that there seems to be purely economical reasons for this decision, and that other institutions in countries with a similar disparity in wealth (regardless of an ongoing ethno-religious conflict) could have reacted in a similar way.

If it was not clear, let me clarify further. If you replaced Israel and Palestine for, say, Brazil and Paraguay, which are two countries that border each other, and where there is some dependency between the two of them (since Paraguay is landlocked, it depends on its neighbour for many shipping routes), and both of them have very different living standards and investment in academia. If the poorest country invites somebody to come give a lecture and pay for the flight for a guy coming from across the globe to come, and the richer neighbour decides to take advantage of this trip to invite the same lecturer to come to their country right after without offering to help with the trip costs, would it not feel unfair from a purely economical point of view?

Well, opinions about the right or wrongness of Israel aside, it is a well known fact that Israeli universities are pretty well funded and staffed (especially if compared to Palestinian ones).
They already have top class academics working for them and plenty of funding to bring other academics to visit them pretty regularly. I have had the privilege to meet many famous Israeli academics, but I am yet to meet a Palestinian one.
If we just ignore the politics for a little while, I can see why an underfunded Palestinian university might feel cheated if they are paying for a guy to come from across the world to give a lecture, and the guys across the border who have lots more funding and better staff than they have tried to amortize Israeli costs of bringing a foreign academic by using Palestinian money. After all, they could have offered to split the bill or something.
On top of that, I'm not sure about the situation right now, but until very recently, Israel (which controls Palestinian borders and tax collection) was withholding tax money from the Palestinian Authority because they were in reconciliation talks with Hamas. Again, ignoring politics, but looking at a very real cashflow issue that their universities might be having, I can see why they might resent this move.

Profiling is only wrong (or at very least politically incorrect) if you do it on the basis of attributes over which the profiled people have no obvious control, like ethnicity and nationality. Law enforcement agencies have a long history of psychological profiling (which is, arguably, also not under somebody's control) that has been accepted by most people as effective, though I myself have no knowledge to ascertain that indeed is effective.

What gives me solace regarding the danger posed by extremists (religious or otherwise) is that almost by definition these people are not terribly smart. If you induce yourself to believe some fairy tale about the afterlife, to the point that you are willing to kill people, you cannot be that rational. Of course the government needs to be watching out for these people (since they are dangerous), but I do not believe it takes all the powers that have been given to the government to keep track and arrest these loonies.