No - when Islam starts losing big battles, many of its adherents will abandon it. It won't take killing on that kind of scale.
Not necessary. Islam is like a bathtub full of water, built around a plug. See #42.
I respectfully disagree. In my opinion, you are thinking about their reaction to a few losses as if they were a rational people. They are not. islam is an insane cult, and it's adherants are insane as well.
A few lost battles will only inflame them. I've got a really bad gut feeling about the whole thing. We need to be prepared to completley annihilate the threat, if we are willing to kick the hornets nest. If we aren't, they will win, because very few in the West will tolerate the absolute destruction that will be required to stop this once in starts.