If anything, I think he may have been trying to explain:
1. why the Islam extremists hate the US... as extremely restrictive religious practitioners, they see the US as the primary source of "evil" in the world (pornography, abortion, open homosexuality, materialism & greed, women's rights, lack of spirituality, etc, etc, etc, in addition to supplying money and arms to Osama Bin Laden's enemies). Now, don't ask me how Bin Laden's followers justify killing innocent women & children in their own minds, as I haven't a clue!
2. why he thinks God may not be "protecting" us from the evil of these terrorists as some of Falwell's followers think a "just God" would do.
I do not think he would say we "deserve" to be slaughtered by Muslim terrorists, and I am concerned that the posters here would jump to that conclusion without hearing or reading his exact words, since he has many enemies that would gladly distort his words for their own reasons. (I am not a Falwell follower)
In fact, I heard him being interviewed by a reporter on CNN friday night and he said the comments were made by a guest he was interviewing on his own program, and that he had no control over what his guests say, any more than CNN had control over what he (Falwell) says on their program.
A direct quote is contained in post 11 of this thread.