E-O:
I agree with the general theories put forth in your posting - rather basic "balance of power" realpolitik approach for the U.S., IMHO.
However, the "red herring" of our having encouraged Saddam to invade Iraq has never been proven. Every account I have read of the meeting between the U.S. ambassador and Saddam seems to point more towards ineffectual communications by that lady that may have been misread by Saddam, as compared to conscious, overt encouragement to attack.
I've yet to see any specific offical pronouncment by Saddam before, during, or after Gulf War I that he believed the U.S. gave him the go ahead to attack Kuwait.....or did I miss something?