The original plan for Hassan was to win the world title from Batista at Summerslam in Washington D.C. so yeah there was definitely a lot of force behind the guy. That being said, the problem at the end of the day was the 7/7 bombings. Simply because it wasn't in America doesn't mean it wasn't a big deal. I've ridden on those trains before and given how many people use them in London, it would be an easy way to shut the city down in addition to the obvious loss of lives. If you're WWE, you can't air that stuff the day of the bombings.
As for the guy playing the character though....eh. He wasn't that great in the ring and he was beaten up by Hogan and Shawn way too early in his run. At the end of the day, Hassan was just a guy who wrestled with an interesting gimmick. He came off more as whiny than intimidating though, which is where he fell flat.
I agree 100% with the part about the bombings, WWE made the right move.
However, I have to disagree about the ring and promo part. He was fresh. He didn't have alot of experience yet. He was talented in the ring, but still green. Of course his matches weren't "WM" type matches. I did see potential in him though.
His skills on the mic were MEANT to show him as someone complaining rather than intimidating, that's why it got heat. That's the same reason why Hulk Hogan and Shawn Michaels beating him up was great, because they were "sticking up for America" and beating up the anti-American. Still, beyond the whiny-ness he was connecting with the crowd, he was a controversial gimmick and he sold it, IMO.
Now, that being said, perhaps he should have been more intimidating at times to keep his character legitimate as a contender. I think you're right in stating that, particularly IF the WWE did put him over Batista to win the championship, they would need to have him seem like a real contender rather than someone who whines all the time, but I still think the complaining is what really got the heat from the crowd.
I do miss Hassan, but I'm glad the WWE avoided the mainstream media meltdown keeping him around may have caused.
Just a sidenote: I'd love to have his character come back and have a feud with a face Jack Swagger character... THAT would be some interesting stuff... Zeb vs. Hassan (and Diavari yelling his translations)