Also, this was not an internal government leak as there were policy makers both past and present on hand when it was handed out.
The problem this poses is that the cat is out of the bag and it may make it difficult for the administration to from a perceptual standpoint navigate with the Saudi's. Then again, with this becoming public information, it may make the Saudi's more proactive to clean up it's own house.
Because Bush, Rumsfeld and the rest of the administration have been trying to emphasize, clearly and unambiguiously, that the War on Terrorism is not a war against Saudi Arabia, and we expect their cooperation.
The Saudi's paranoia level was raised sharply in their dealings with Madeline Albright. Bush is trying to get back to the status quo ante.
Unfortunately, a few low level politicians in the Pentagon and the RAND Corp. are trying to undermine his strategy, which would harm his credibility with the nations he is trying to influence. There could be severe consequences, internationally and domestically.
You said: "Why was the proposal idiotic? Rumsfeld was only mad because it was leaked. It may have been leaked deliberately to put the Saudis on notice."
It may have been leaked to serve other purposes too.