There is a world of difference between 2003 and 2007, as Strategypage summarizes:
As the surge forces proceeded to clear entire towns and neighborhoods of terrorist groups, the Sunni Arab civilians were offered a deal. If they would establish a local security force, and stop future terrorist operations, the U.S. would provide weapons, training and cash. If the local guard force could not do the job, the U.S. and Iraqi troops would be back, and that could be very bad for the neighborhoods. This had been tried before in Sunni Arab areas, but not with complete success. This time around, there was a widespread attitude change among the Sunni Arabs. The feeling was that the whole terror campaign had been a failure, and the only way out now was to turn on the terrorists. It was always obvious that the Americans could go anywhere and kill terrorists. But now the Iraqi army and police, made up largely of Kurds and Shia Arabs, was also able to fight. This was something new, and the Sunni Arabs didn't want to be on the receiving end of more counter-terrorist operations carried out by Kurdish and Shia Arab troops.
Now, the Iraqi government is strong enough to absorb former enemies without as much risk of defeat. Security forces are much larger, more experienced, and better trained than ever. Recall that in spring 2004, half the Iraqi security forces evaporated in the face of the enemy attacks. This last year, Iraqi forces have fought well despite the horrible toll terrorism was taking on civilians and Iraqi soldiers alike.
Now, the Sunni Arabs risk expulsion from Iraq if they turn on the government and fight after being absorbed into the security system. We have databases of biometric data and have put the new local defense force members into that database. Should they turn on the government, we can track them down more easily.
Could the Concerned Local Citizens turn on the government? Sure. But it is better that they have defected and are likely to remain out of the enemy column. In 2003, the Sunni Arabs still assumed they'd regain control of Iraq from the Shias, who the Sunnis considered inept rubes. This year, the Sunnis worry they could be driven from Iraq completely by the Shias and Kurds.
I'm far more confident that these people will remain on our side than I was that "former" Baathists would have stayed loyal in spring 2004 if made part of the army.
Or are you saying we can only kill our enemies and not talk to them and accept their surrender?