Your argument as a awhole I've seen before and it does have merit, except this part.
In fact, I would contend that Islam is the primary reason why arab culture which once led the world in sciences and math has been left behind by the western world.
The same culture that led in maths and sciences was even more deeply religious then the one we see today.
If anything is holding back the Arab world at this point it is Arab leaders who do little more than rule and do nothing Islamic whatsoever.
Syria, Palestine, Saudi Arabia (Definetely) etc. all have been held back a great deal. There is also a tribal fragmentation that is pre-Islamic, which still exists today (Islam has mended many tribal issues but there are and were too many to do it effectively) which divides the Arab peoples.
Muslims do have a great deal of freedom of thought, many, many Muslim philisophers have come and gone, there is a great deal of Muslim Poetry (not religious poetry) and Music which I believe points this out. While Europe struggled in the dark Ages, the Muslims flourished as a result of their insatiable (God commanded) quest for knowledge and wisdom. A rarely mentioned tenament of Faith is that it is the duty of every Muslim (man and woman) to seek out knowledge and continue education for their entire life. While it may be commanded, it opens up a billion doors and pathways of free thought.
However it is a religion of laws, much like Judaism and as such it does govern a great deal of everyday life. Don't eat Pork, don't drink alcohol, don't have sex before marriage, don't swear, wear conservative clothing, pray 5 times a day, starve yourself a few days and weeks out of the year, there is one God and one God only and these were his prophets sent down to reveal you to him.
I wouldn't misconstrue this as an inability to think freely. The rigidness of Arab thought predates Islam, it has however been applied to Islam, and this is a flaw.
English translations of the Qur'an are deeply flawed. Deeply deeply flawed, no matter what you do. Believe it or not, it's not a smokescreen. Arabic language has words with 50 different meanings where one in particular can be derived based on the placement of a vowel.
This is why the Qur'an is the most important worldly thing to Muslims.
An example might be the infamous 70(?) virgins verse. Tracing back through 10s of translations I've found the word virigns and Raisins are used....What a surprise that would be...."Alright, time for my virgins." "Here's your raisins Malik." "Damnit"
As such, reading two copies of English translations gives you a basic and simple knowledge, but not the proper knowledge. The people who blow themselves to bits have the same interpretations, all basic and simple because that's what they want to hear. I rarely comment on the Qur'an for this reason. I have read over many, many different copies of it, in English and Arabic and I still do not have the knowledge to give a good lesson on it. This is a flaw that many Muslim Clerics have too, and as such they have given idiot advice and words on something they know little about.
The Qur'an, is supposed to be the literal word of God. I find contradictions in it, but in reconciling them I find myself so deeply entrenched in thought that I really see the merits inherint. I do not want to preach though so I will end that there.
The greatest Muslims, I was once told, are the ones who never talk about it.(As you can see, I'm not great at all)
Anyhow, I really, really, really, really, really, really, really, don't want this thread to turn into discussion solely on Islam. It's a very large aspect of Arab culture, but many aspects of Arab culture predate (as Pieman has pointed out) Islam, those are the ones worth exploring before any meaningful debate on Islam is brought up.