Of course Letterman was talking about himself when he said the bit about pretending to be courageous. That much is obvious if you try not to bring preconceived notions to the table.
I honestly do NOT think that David Letterman intended to slight Bush when he gave this talk. I think the man sincerely wanted to say what he felt about Rudy and that's the end of it.
If others choose to read secret codes into what he did NOT say, then have at it.
But I have to say that I agree with every word Dave said about Rudy. The man is real.