Iraq was no longer an obstacle to Iran by that time, its intel officials were already holding meetings with NIF’s Tourabi, Iranian IRGC and with bin Laden in Sudan. If Iran was such an obstacle, Iraq would not have used Iran to store the aircraft Saddam didn’t want to lose to US airstrikes, and Iraq’s al Dhouri, who later formed ISIS with Zarqawi, would not have been so cozy with Iran’s ally and Hezbollah hangout, Syria, and its ruling Baath Party.
If there’s one thing everyone should know about the Middle East, it’s that rivals there are more than willing to set aside rivalries for what they perceive as a greater goal.
But an argument can be made that we pushed Saddam into the arms of Iran. When the USA takes a lower and less-threatening profile, regional powers will fear each other more than they fear the Americans.