In the eyes of the public, I think that it was very much believably about terrorism-- people have internalized the false maxims that security must be sought, and that liberty must be traded to get security. This wasn't really a popular trope before the anti-terrorist propaganda came along.

I agree with you when you say that it was never about terrorism but rather increasing executive power, though. There certainly was a trend toward increased surveillance for many years before, but the entrance of surveillance into the new world-dominating media of the internet is a story in and of itself, I think.