The bad things - of course. We have to push harder to get all Schengen states into the waiver agreement. Perhaps it would be better to let the waiver go alltogether, though I'd wait out the Bush administration first.
I think it is more likely that they don't understand the EU from the point of view of the citizens. That is, they are vaguely aware of an image or legitimacy problem, but they can't put themselves in the citizen's place. A case of "why do they hate us?"
A communication department that can come up with the name "Plan D" for their communication strategy is doomed. We have met the enemy, and he is us — Pogo