Rationality is based upon a set of given things or assumptions. Your basis says that suicide is irrational. An islamowacko's basis is that suicide and killing infidels is rational. He is no less rational than you if you understand his basic ethics. We don't like it. We value life. He doesn't. It is perfectly logical that you wouldn't blow up yourself to kill 20 people on a bus. It is also perfectly logical that he would. Rationality is a logical process starting with certain basic assumptions and values. If your values were the same as his, it would be rational for you to blow up the bus, too.
No, your reasoning is faulty because Islam is based on the Koran which is in itself irrational. It has so many contradictions that it stands for nothing and everything, whatever you want it stand for. You can't justify an irrational ideology that is based on irrational, contradictory rules of morality. You are using circular logic.