It's not an awful idea, to be fair. Well, it is, but simply from a technical stand point - the idea of being able to defend your 'critical infrastructure' in timely manner is sound.
Couple of problems really, which i don't think the good Col' and his researchers have thought of - firstly, a NIPS with the ability to send Gig's worth of data at a host is a terrible idea! Can you imagine the false positives, and the amount of hassle that will come with them? Secondly, who's infrastructure is going to carry these attacks? They can't believe it is okay to flood every peer on the way to Iran every time their NIPS identify a threat? Even if they do, do they realise that the run the real possibility of causing a DoS on themselves because of this? Say multiple threats attack them from multiple geographical locations, all a sudden their beasting every link out of the US; meaning Lt. Dan on patrol in Iraq can't relay critical information back to the US regarding a legitimate terrorist threat!
The US would need to have a wide range of diverse locations around the world to make this work, and a system that doesn't blast countries off the face of the net. To be honest, unless they do it right they would be better off dropping a bomb on the offending host - it would cause less damage!!!!