Kenneth Waltz seems to have cherry picked information to support his hypothesis. The full article mentions that he basis his hypothesis on India-Pakistan relationship, but it is clear that he has ignored several things in it.
First of all, unlike what he mentions in TFA, India and Pakistan relationship has had a full fledged war (and not just terrorist actions launched by Pakistan) , after Pakistan conducted A-Bomb tests. http://en.wikipedia.org/wiki/Kargil_War
India has come very close to waging war on other occasions as well, especially after the terrorist attacks on the Indian Parliament.
Waltz is right that the possibility of nuclear war raises the stakes, but what he does not acknowledge (and what the Pakistani example shows) is that the a nuclear state might indulge in risky behavior against another nuclear states, precisely because it counts on the other state to act more conservatively. And sooner or later, there is a miscalculation of the risk by the aggressive nuclear state.
This makes the entire premise that Nukes Are "The Only Peacekeeping Weapons the World Has Even Known," a wrong one.