Permitting sharia was a major mistake on our part, but again, I don't think we understood Islam very well when we started on this. Islam is theocratic; that is, it is not only government by the clergy, but government by religious law, where the religious law and the civil law are one and the same.
We were probably understanding it in the sense of an established church, like the Anglican church in England, which does not govern in any way and in fact is governed by the state or state-chosen persons. Islam has never viewed it this way, and we made a major error in thinking it did.
You are most likely correct. Official Washington is rather dumb about religion in general. Everyone needs to be shown closeups of FGM and women being stoned to death for adultery to understand primative Islam.