It might not technically fall under the category of propagandizing the US public, despite the WaPo's citation of Pentagon documents that claim "the US home audience" as an explicit target. (Let me emphasize "might" and "technically.")
People who've been around blogs for awhile know very well that a story from overseas can reverberate dramatically within US media, and often in unforeseeable ways; many bloggers have assumed for years that the US was using overseas media to shape domestic debate. Well, now we have some proof.
It might be time to revisit our laws against propagandizing the US public. In the electronic age, there really isn't a clear-cut line between overseas and domestic audiences. Either the regulation against propaganda has become meaningless, or the military needs to rethink the value of disinformation.
Of course I lean towards the latter option. The credibility of the BBC and the pre-Bush VOA for desperate, disenfranchised people was premised on those agencies' ability and willingness to report on politically unflattering stories. If people behind the Iron Curtain could find inspiration in an independant American media, how on earth do policy-makers in Washington hope to reach the Islamic "pious middle"* by dismantling VOA in favor of Al-Hurra and fear-mongering?
*Aqoul.com has defined and defended the idea of the "pious middle."