There certainly seems to have been a change in the response to terrorism in the last two decades. Back in the era of the Irish Troubles the UK suffered more terrorism than now, but it didn't stop any vital services from functioning, at least not for any longer than it took to clean up from an incident. The security services were there, but they worked low-profile, doing their job silently and efficiently without creating undue public anxiety.
One factor we need to be cautious of is that a whole high-profile security industry has sprung up around counter-terrorism, and that it now benefits that industry to spread FUD so as to sell their products and services.