Understand that it's absolutely not "unimaginative" "military leaders" who are imposing the moronic rules.
It's naive, unimaginative civilians that are imposing them. This is going to get me a lot of thumbs down, but you asked.
It's the people who think that a war can be played by a set of rules... like a boxing match. It's the people who think that if we play by a set of rules, it somehow makes the horrors of war nicer. It's the people who think they can support the troops but not the war. It's the people who have never been in the military but feel they can outguess the experts based on a couple of Rambo movies and having played with a GI-Joe doll with the kung fu grip as a kid. It's the people who think that they have a better understanding of what's going on from watching a a half-hour news show of 25 minutes of drug ads and a couple car ads, and two or three 30-second spots of what passes for "news" than the experts on the ground who are in the thick of things.
I was in three fights in elementary school. All three were with the same guy. The first time he got in fast and clobbered me. There was a big crowd.
The second time I got in first and wound up on top of him... he was on his back and his arms were pinned under him. I took his ears in my hands and said loud enoug for the bystanders to hear something like, "I could pound your skull into the pavement if I wanted. But I'm not going to. I don't want to fight. I'm going to give up an walk away." I did. He jumped me from behind and clobbered me.
The third time he caught me alone. This time he pulled a knife. He was angry that I'd come so close to beating him during our second encounter. I kicked him in the groin and, while he was writhing on the ground, I told him to leave me alone.
Now I played by the rules the first two times. While I might have been the "nice guy," it only ended in my getting clobbered. But after our third encounter, he never bothered me again. And nobody else did either. I don't know if the word spread that I was a "dirty fighter" or that I was no longer an easy target. I really didn't care. I was still a nerd, but I was a safe nerd.
Point is, you can play by the rules for the "honor," or you can play to win. If a guy comes at you with his bare hands,.grab a club. If he comes at you with a club, grab a hand gun. If he comes at you with a hand gun, grab a rifle. But our ROE seem to be, if he comes at you... try to reason with him... find out if his intentions are hostile before resorting to violence.
I live in a Veterans Home. I heard a humorous comment the other day by a WWII Veteran. The guy said, "We used have to challenge people in the dark with, 'Who goes there? Friend or enemy?' How stupid was that? Who's going to say, 'Enemy'? How did we ever win that war?" Want to bet they made the required challenge and then proceeded as if there was no reply? Soldiers don't want to die.
A couple of years ago our troops got some bad press for opening up on a car driven by Italian Secret Service personnel in the process of rescuing a captured Italian journalist. They weren't told of the mission -- the Italians said it was classified. They failed to heed the warnings to stop -- never did find out why that was. They never tried to identify themselves. So you're at a checkpoint. A car comes towards you at high speed. You shout a warning. You probably fire into the air. The car keeps coming. It's almost within range that a blast would kill you... like the one the day before that killed a couple of your buddies. To heck with "Mr. Nice Guy." You only want to go home to see your wife and kids.
Leave the tactics and rules to the military, not to politicians who sit safely behind desks surrounded by security and half a world away from the actual danger. It doesn't take a Ph.D. in Math or Astrophysics... or even a law degree. It takes having been there... experience notably lacking in so many of our political leaders today.
ADDENDA:
(1) Those who say that playing by a set of restrictive rules that are not applied equally to the enemy have never faced the enemy or are terribly naive... probably both.
How about this rule of engagement... "Do not fire unless fired upon." The person who made up that rule was never fired at or is willing to bet the lives of his troops on the inability of the enemy to shoot straight... ever. In my experience, if the enemy gets off a shot, you have a good chance of being dead.
(2) The military is trained to win. It's in their credos and values. I've read quite a bit of the Navy Regulations in my lifetime. There's a rule for just about anything you can imagine. But one action is notably missing... that of surrender. They don't tell you how to do it because you're not supposed to do it.
Now along come moronic rules of engagement. While it may not be the intent of the dopes who make them up, they effectively set the military up to lose. This is especially so if, as the asker points out, the enemy isn't held to the same set of rules. The enemy doesn't care if you call him a "bad guy." Terrorists hope you do... that's why they're called "terrorists." So, by setting up arbitrarily enforced rules you hamstring our troops and aid and abet the enemy.
Let's suppose we agree to a fair fight... let's say a boxing match. We agree to wear regulation gloves. We agree to all the conventional rules of boxing. There won't be any witnesses. We trust each other. So you show up wearing regulation boxing gear. During the fight it looks as if you're going to clean my clock. The good guy wins... but I pull a knife. Oops... the good guy dies. I cheated? Yep... but you won't bother me any more. You played fair... you're honorable and upright, and true. Maybe... but you're dead.
War is not a nice thing. By applying rules to it cannot make it a nice thing. In war people get killed. Unfortunately they're not all on the "other side." In war there is damage. Unfortunately it's not always restricted to that which you intended to damage. And trying to invent rules to prevent the deaths of the "wrong people," or other "collateral damage" is naive, ignorant, or just plain stupid.
A pilot in Iraq put it this way. Some guy with stars in his eyes said something like he wanted to be a Marine because to die as a Marine was honorable. This pilot said something like, "If you die a Marine, you're dead... period. But if you live and fight like a Marine... that's honorable." General Patton said it something like this... "Nobody ever won a war by dying for his country. He won it by making sure the other guy died for his."
(3) The philosophy that the ends don't justify the means is just as incorrect in this instance. The only "ends" a soldier has are the success of the mission and making it out alive. He knows two things about the current enemy. The current enemy wants him dead. The current enemy isn't too particular whether or not he makes it out alive.
(4) And for the post that the fighting is over... and that this is now "occupation," here's a flash... the terrorists are still fighting. And, in case you've missed it... we want to get Iraq able to stand on its own feet and then leave. It's the terrorists (most of them are not Iraqi) who want to set up their own little Husseindoms. It's they who want to occupy Iraq... and stay... and grow rich and powerful... as did Hussein.
I'm sorry if this offends people, but I've been there and done that. And I've done it up close and personal... not from 200 meters through a telescopic sight, or from 35,000 feet with a smart bomb. When you hold a dying buddy in your arms and are beating yourself because you can't do anything to stop his death and because there might have been something you should have done to prevent it... one tends to get a different view of things that if one were sitting in front of a big-screen HDTV sipping a latte with the luxury to play mind games.