Stupider than you could possibly imagine:

As American troop reinforcements head to Iraq, ... there is a growing expectation in Washington that a coalition dominated by religious parties of the Shia majority is likely to emerge as the first Shia Muslim government in the Arab world.

One US official, an expert on the Middle East, reflected on the unforeseen consequences of last year's invasion.

"Now we are willing to countenance a limited theocracy in Iraq, limited by a weak basic law that guarantees basic civil liberties," said the official, who asked not to be named. "That was not the original idea." ...

--Financial Times

"Unforeseen consequences." And why were they "unforeseen"? A George Packer article published in The New York Times Magazine a couple of weeks before the war began gives us a hint:

When [Bush] met with [Kanan] Makiya and two other Iraqis in January, I was told by someone not present, the exiles spent a good portion of the time explaining to the president that there are two kinds of Arabs in Iraq, Sunnis and Shiites.

Duh.

(FT link via Rational Enquirer.)