Your argument is based on cost, rather than the morals of the punishment itself (or even reward, in a suicide bomber's opinion?)? I don't think the debate should even touch on cost and, whichever way it goes, it's a far more fundamental moral debate...
One thing on the suicide bomber thing. While I'm no expert, I'm fairly sure that they want to die in 'honour', whilst doing an act in the name of their religion and God. I don't think this would apply if they were sentenced to a death penalty, even if they had already carried out the intended act. So I don't think they'd see it as a reward.
Agree with the rest of your points though.