I vehemently disagree with this. Islam DID modernise; what we're seeing is a regression, and I think a good deal of the blame can be placed on Washington and Moscow.
A half-century ago, very little of what was happening in the Middle East had anything to do with Islam. Most of the leadership in the region was secular; some states were quite democratic.
Egypt is one of the most conservative places today, chafes under the yoke of a secular government, wants to be Islamist. A half-century ago under Nasser, Egypt was the source of secularism in the region and was pulling other Middle Eastern nations towards its secular nationalism. Similarly, Iran was extremely secular in the 50s, and remained so under the Shah; many secular elements were instrumental in pulling him down.
Both of these poles were toppled by American efforts. Egypt was slowly pulled towards the Washington Consensus by buying the government, which became increasingly repressive. The same result was achieved in Iran with a coup that toppled the democratic government. In both of these places the reaction to a repressive secular regime had a strong Islamist component (both Shia and Sunni).
It wasn't just in government that this reversal happened; the primary popular resistance organizations during the 20th century were also secular. The PLO, PFLP, and so on were all secular Marxist organisations, and young radicals fighting against American hegemony, the same space ISIS has colonised now, would not have given a fig for jihad. It was the failure of these organisations to provide the liberation sought that led to the eventual rise of Islamist alternatives, like Hamas, Islamic Jihad, and al-Qaeda.
Contemporary Sunni jihadi ideology, in fact, had its origins in Egypt in the 60s thanks to people like Hassan al-Banna and Sayed Qutb, who developed much of the thinking that fueled al-Qaeda ideologically. This was a modern development, a reaction to the spread of secular thought and colonialism; it is not a continuous expression of Islam.
Finally, let's not forget the active American support of conservative religious Saudi Arabia, to the tune of billions in military hardware and ironclad political alliance, as well as the arming of the Afghan mujahideen against the Soviets, both of which were signal events in fanning the flames of radical Sunni Islamism.