ThinkProgress seems to think that this chart measures some kind of progress. They just don't say for whom.

Seriously though, if insurgent attacks are up, while our casualties are down, then I'd say that chart represents desperation on the part of the insurgents. It certainly doesn't show any increase in effectiveness. Unless, of course, increased lame-osity is meant to shock and awe the anti-war crowd, in which case -- mission accomplished.
I'd say that they're running out of competent insurgents.
Even in a huge population, the talent pool of excess assholes only runs so deep. After a while, you end up using Zippy, the guy who has to wear loafers because he can't figure out shoelaces.
And attacks generally go up when you go out and engage the enemy.
This just in: terrorists most likely to attack those who are going on the offensive against them.
Also, water is wet, and men find Scarlet Johanssen attractive...