Earlier quoted context omitted.
The United States used to be an example to the world. As a nation it used to take its founding principles seriously. That started changing during the cold war and became most obvious post-9/11.
if that's true then the terrorists have won.
The cold war marked the beginning of global surveillance: the USA and other world powers launched satellites pointed at the Earth in order to constantly watch their enemies. After 9/11, the definition of "enemy" apparently expanded to include a nation's own population. Thus the 21st century is the beginning of total surveillance of all humans on Earth, not just enemy military forces.
Terrorism really is effective. America was not defeated but it a certain way it was destroyed. It abandoned all the principles it stood for in the name of national security.