Senor is arguing, I support freedom of religion, and I believe that your group doesn't support terrorism, but other Americans don't feel this way. Of course this is an argument for caving in to any popular prejudice or social phobia whatsoever. Hey, I'm happy to let a black family move into the neighborhood, but other people here think you're probably crackheads who spray random gunfire at night, so in order to prevent racial strife you should probably live somewhere else.
This episode is a major statement about American pluralism, minority rights and America's ability to make the necessary divide between moderate and extremist Muslims. A lot of people are going to eventually feel ashamed about where they stood.