Gavin,
First, I'm no marathon poster, so I'll surely miss a few of your points.
In the immediate sense it is the Iraqis themselves that are being spared. You seems to forget that they were dying at a pretty decent clip before we ever got there. In the long term sense it is certainly the region, and possibly the world as a whole. If true democracy were indeed to spread through this ME the world will be changed for the better forever (forget your opinion on it working or not, I'm just telling you the goal). Nearly all the current inter-country conflicts are in the ME.
Now I am not naive enough to believe this was our main motive in the outset. I believe W and pretty much everyone else, fully believed that Saddam had WMD's and that he was emboldened by 9/11. W never said he had anything to do with 9/11, but he did imply that he had a seat at the table of terrorist kingpins. I would have to say that is/was true. When I think of how we could have gotten it so wrong I just remember that the CIA IS just another government agency
but now that the main cost (both in humanity and dollars) has been spent, we owe it to the world to do right by the country and the region.
I do believe terrorism must be stamped out, as I cannot imagine waiting it out. The idea that we can "make nice" is silly. These are not rational people.
You asked if we should go around cleaning up all dictatorships. The idea is that we won't have to. We make an example of one and the rest fall of their own weight. Now, it doesn't help that the peanut gallery of the leftist nations find time only to criticize us, rather than these dictators, but I digress.
Now, these are the theories we're working with. Time will tell how well it plays out.