But I've been led to believe that "dirty bombs" are something of a red herring, although rumors of their danger have been helpfully pushed by the media, of course.
In the documentary "The Power of Nightmares" the filmmaker does a segment on the fallacy of dirty bombs; I just did a quick Google search and turned this up:
Dirty bombs, also known as radiological dispersion devices, are old-school explosives packed with radioactive materials. Rumored to be a weapon of choice among Al Qaeda operatives, they have yet to be used. Luetzelschwab and other radiation-safety experts think the probability of a dirty-bomb attack is slim for several reasons.
First, he says, to build one of the bombs terrorists would need to get their hands on radioactive materials. While it's possible, especially on the world market, they would have to get the material through sensitive gamma-ray detection machinery at U.S. seaports and airfields. Building a dirty bomb stateside also would be tough since sources of radioactive material (hospitals, labs and nuclear power plants, for example) are highly protected under new homeland-security guidelines.
Second, Luetzelschwab notes, anyone building a dirty bomb or procuring radioactive material for one would be exposed to fatal doses of radiation.
Third, while the bomb's engineers would be subject to high-level radiation, most victims of a dirty-bomb explosion would only be exposed to low-level, dispersed radiation.
The bottom line: The risk of injury from the bomb's explosion is higher than the risk of injury from contamination. In terms of bang for your buck, dirty bombs just aren't worth it, Luetzelschwab says.
http://cfserv.dickinson.edu/cnExtra/detail.cfm?170Your suggestion that "one possibility is simply to instigate more terror and panic" is more likely to be the answer. But obviously we shouldn't rule anything out.