OK, we're all trying to divine why a normally canny operator like Rove would effectively put himself out to be crucified for outrageous, inflammatory, and easily refuted remarks claiming "liberals didn't want to defend America after 9/11".
I think the reason is that he knows we are about to accuse the Bush administration of similar things accurately and with evidence. So he's throwing those accusations at us first hoping that the public will just see accusations going back and forth and not look at the evidence underneath.
It's been obvious for a while that Bush at least didn't try to stop 9/11, that he used 9/11 as an excuse for a counterproductive war in Iraq, and that he has deliberately weakened the hunt for OBL. However, the MSM and the Democratic leadership haven't brought this up for a variety of reasons. Now, between the DSM, Conyers, Dean, and the shift in public perception, it looks like a lot of important people are about to call Bush out for betraying us on 9/11 and its aftermath, and it's going to be on the news.
So, what's for the Repubs to do? They've been stonewalling and distracting for years, remarkably successfully, but there's too much out there to cover up. I think they recognize that in a few months at most there will be major Democratic leaders on the news regularly talking about how Bush has betrayed the country on 9/11, using that catastrophe for his own personal goals while harming America's interests. They know from their own experience that denials don't help much and they certainly can't refute it.
So their last line of defense is to try to get the American public to ignore it. That seems unobtainable - how do you get the American public disinterested in themselves being sold down the river? - but they've come up with a plan. They jump in first with a bunch of lame and outrageous statements about how we are supposedly traitors. When we start calling them traitors to the country the public will see this as rhetorical tit-for-tat and miss the fact the we have evidence and they really are traitors.
So, how to respond?
Actually I think the natural response, to fight back, is basically the right one. Bush did betray America, we can't softpedal accusations now that they accuse us of it, so call them out for what they've done. The thing we have to watch for is to use our advantages in this rhetorical war they've started - that our claims are true and that we have evidence. So, when we say that Bush has let 9/11 happen, let OBL go, killed thousands of American soldiers, etc. we have to make sure to mention the proof that he did it. I think we want claims like:
Bush allowed 9/11 to happen by ignoring a memo in a cabinet meeting saying Al Qaidi was planning to use airplanes to attack the US.
Bush allowed OBL to go free by diverting 700 million dollars Congress had allocated from the Afghan War to Iraq.
Bush killed thousands of American soldiers by attacking a country the DSM show he knew had nothing to do with 9/11.
Bush increased support for terrorism by approving torture of detainees unrelated to terrorism and Al Qaida.
etc. Fill in the details as you wish, we have plenty. I do think we should be more precise and a little less inflammatory in our claims, because they are true, and we don't want to give opportunities to start side issues about overstatement.
There's a clever subtlety in Rove's accusations.
He accuses us falsely of not wanting to defend American in the immediate aftermath of 9/11. Note that while Bush has repeatedly sold America down the river, the one time he actually did something to defend the country was shortly after 9/11, with the attack on Afghanistan. He's hoping we'll make blanket statement about Bush never doing anything about Al Qaida so he can refute them by bringing up the Afghan war. This is another reason to be specific in our accusations of his misdeeds. As other posters have stated, we need to remind the public that the Senate Democrats unanimously supported the Afghan war.
Demanding an apology and maybe a resignation seem the reasonable thing to do, but there's not much point. They're about to lose and this is their Hail Mary pass. They can't back down, they can't apologize. The only question is how we get from basically reasonable discourse "Apologize for that outrageous statement" to "Bush has betrayed the country by..." I don't have any specific suggestions on this, but I've seen several in other diaries, like mentioning that this is a distraction from the real issues or just continuing to bring it up in DSM hearing and the like. But, we can't wait too long - the war is on.