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The raging obsession the Bush administration had with Al Jazeera mirrors the raging obsession the administration had with incorporating the broader Middle East into its new world order. Its approach was that of a raging drunk with no sense of what consequences failure to subdue either would have. The administration, as you have so eloquently written, never had any sense of the history or culture of the people they so desperately wanted to subjugate. But the most fatal flaw in their plan for both the Arab media and the Middle East was their lack of respect for their own national media and the history of our own country. Americans know intimately that we are a flawed people, which is why we strive purposely to overcome. Our history is full of great Americans who struggled for a broader truth which at its inception had very little public support - Martin Luther King comes to mind. The flaw in Bush's war is its cumulative effect - no WMD's (Americans ho-hum accept maybe this was an honest mistake), no candies thrown at troops (oh well can't get everything right), torture of prisoners (something is definitely wrong here), war raging on for several years and thousands of humans dead (this administration has to go), and now lets kill the messenger (ugh). Justice moves very slowly in America, but it does move, and Americans do not like being associated with a losing, dangerous and morally bankrupt system. Our history is full of movements that have been thrown to the dustbin of our national memory, the Salem witch trials, slavery, Indian injustice, McCarthyism, segregation, discrimination and now hopefully pre-emptive war.
As others have pointed out elsewhere, the fact that Blair has invoked the Official Secrets Act is a conclusive demonstration that the memo in question exists and is a government document.
The question of its exact content, of course, remains. Notably, the OSA acts amongst other things as a gag order that prevents press discussion of the contents of the memo. To the extent that the memo demonstrates the President's poor sense of humour or discusses troop deployments or other sensitive matters, you would think that, respectively, biting the bullet and a bit of minimal redaction would permit the release of the memo and make clear that there was no plan to attack Al Jazeera in the works.
Therefore, to the extent there was no such plan, why invoke the OSA for gagging purposes and refuse to release the memo? One (and perhaps the most) plausible conclusion is that the memo would reveal that such an operation was indeed contemplated by the Bush junta. The one thing worse than allowing the world' media to speculate endlessly on the topic, tipped off by the invocation of the OSA, would be publishing a memo that confirms the speculation.
As Mr. Cole infers, the current strategy is instead aimed at reassuring both leaders' core supporters -- those members of the public who derive a psychic benefit from knowing that foreign, non-english-speaking infidels are being smited with their tax dollars, but don't like having to think about the corpses created as a result.