A nuclear armed Iran is inevitable, IMO. The only means of trying to stop it - bigger and bigger threats, short of invasion no-one has the stomach for - seem to me to only guarantee this, because they reinforce the motivation for getting there.
Let's put this in perspective. At the end of WWII America was producing 50% of the WORLDS manufactured goods. Russia had fewer allies, a vastly inferior conventional Army, and infrastructure from WWII all the way to it's fall. America has had sufficient nuclear weapons to be concerned about a large scale invasion and never really geared up for a large scale war. So, America had basically no reason to attack Russia or fully mobilize as long as the rest of the world did not become communist they had little interest in what happened.
However, after WWII Russia was paranoid with good reason. http://en.wikipedia.org/wiki/File:World_War_II_Casualties2.s... Close to 13% of their population had just died and they had little interest in being so weak that a country could decide to attack them while in the middle of a war with several other countries.
The Cold War was better than WWIII but it wasn't something to be cavalier about, over a hundred million people died due to the oppression in communist countries, and a far larger number of people's lives were irrevocably damaged by over a half century of tragedy. Even if a nuclear armed Iran likely won't end in a nuclear war that doesn't give license to simply pretend as though the prospect of a nuclear armed Iranian regime is anything other than a huge step backward for the world.