"Secondly, the U.S. will have to maintain a delicate balancing act with Pakistan to push this deal through. Islamabad has done much to support the war on terror, "
That logic doesnt hold water anymore. The US-India relationship needs to be independant of PAk. What balance? A balance between a tin pot dictatorship and a democracy 6 times its size? Pak is a puny nation that simply needs to understand its place in the world. India is goingto do things working with the US that will never be possible for Pak. The whole idea of balance is pointless.
All of your points are correct, but there is one obvious need to keep Pakistan in the fold. If you abandon Pakistan, you run the risk of letting the country fall into the hands of the Islamists. When that happens, you've got a Taliban-style government in a country of 100 million people, armed with nuclear weapons and medium-range delivery systems--with the capability to field a crude ICBM within a decade. If we ever win the War on Terror, we might be able to tilt in favor of India. Until then, we have to keep Islamabad out of the hands of the Islamists, and keep Pakistan engaged in fighting the terrorists.