When Bush decided to exclude anyone who had been a member of the Baath Party, he set the stage for what we see now. To have ousted Saddam would have been enough, but Bush got greedy. I suppose that if we had captured or killed Saddam early on, it would have seemed safer to include the Baathists in the new regime.
We could have said to them, "you can be in or you can be out. If you're in, you have to play by these rules. You have let the other parties compete through a democratic process", etc. But we told them they were out. So they had absolutely nothing to lose by starting the insurgency. Some of our generals are suggesting we start bringing in these people where we need their experience and training. I say they are on the right track.