"We often use the word "fundamentalist" wrongly, as a synonym for "orthodox". In fact, fundamentalists are unorthodox - even anti-orthodox. They may invoke the past, but these are innovative movements that promote entirely new doctrines."She's right about fundamentalists claiming antiquity for what are in fact theological innovations but she too uses the term 'fundamentalism' incorrectly. Both in theory and practice, fundamentalism is not the belief that the text of the Holy Book is to be taken literally - it is the believe that it is both inerrant and exhaustive on all matters of human conduct. But no-one should doubt that this allows for allegorical interpretation. I'm afraid it's a very vulgar example but if this doesn't convince you that fundamentalism has the capacity to allow allegory, I can't think what will.
And I think Karen Armstrong is wrong to say, "informed extremists today do not need to be told that their holy war is unorthodox; they already know." No. They know they are schismatics - but this is not the same thing as "knowing you are unorthodox." The process she describes is sociologically correct but a crucial component of this is that sects and cults everywhere break from the orthodox tradition but they do this with the self-perception that they are the carriers of the real identity of the parent body, which they generally regard as corrupt, degenerate and apostate.
She's right to say it's likely to be futile to have a bunch of 'moderate clerics' pointing out their heterodoxy. But on the other hand, it can only be to the good if as many people as possible with any understanding of religion should point this out. Al-Qaeda is a heterodox cult that claims to be the true ecclesia. It is entirely unfair that the majority of Muslims should have to point out that the name of their religion is being abused and defamed. But the freedom to practice traditional religious piety requires it nevertheless. And when apportioning blame for this sorry state of affairs, we could maybe attribute as least as much to those who claim divine sanction and consecration for acts of bestial inhumanity as to 'Islamaphobic' journalists?