I think it should be really obvious that it is a bad idea and why it's a bad idea.
Does it demonstrate intolerance? Well, who really says we should tolerate the mass murder of 3,000 Americans? I don't think opposing a mosque at Ground Zero means that we are intolerant of other religions. We welcome other religions all the time.
The question I have is why does this mosque have to be located at this spot? It's kind of like having someone dance on your grave, isn't it? Why not move this mosque to another location? Why is it that we must be so sensitive to other religions, yet the mosque builders don't have to respect or be sensitive to the fact that 3,000 US citizens were mass murdered at this particular site? Isn't that kind of...I don't know...stupid?