It's a nice idea, but it won't work. The reason MAD worked in the first place is that it only depends on a handful of top political leaders acting in a self interested manner. That is one of the bedrocks of human nature, we can depend on that.
With the terrorists there are too many people the power to pull the trigger, and worse yet, they are usually religiously motivated not motivated by normal self interest. The religious fanatics are liable to want to trigger larger and larger reprisals, exactly to start war.
That's ignoring the problem of targeting, To attack Mecca would be to punish all Muslims for the acts of a few.
Jay