Those so called "moderates" should start calling themselves something other than muslims.
Muslim theologians since the middle ages have felt that it bad for Muslims to live in a non-Muslim country, but that it was better to live in a country where the laws were not supportive of Islam. They felt that the danger of becoming apostates was too great in permissive countries, and it was better to live somewhere where your faith was not accepted, so you'd be forced to defend it.
This is no different. Muslims in permissive countries tend to backslide into a soft, inauthentic form of Islam. What we in the west would call 'moderate Islam'. Increasingly, some people in these permissive countries create tension where there is none, and force everyone to choose sides. They invent injustices out of thin air, as with the Danish cartoons or the Pope's comments. This makes for poor neighborly relations, but it leads Muslims to a more pure form of Islam.
True Islam cannot exist without the force structure from the top enforcing Sharia, or from an external threat that forces radicalism. 'Moderate Islam' is the rejection of jihad, and the acceptance of apostasy.