Reasoning with the Unreasonable
The message we are sending to all oppressed people is, we're not willing to risk a "working relationship" (read, a relationship where we allow regimes to get away with murder and oppression in the name of 'rebuilding our image' in the world) with an oppressive regime in order to support a people who wants to enjoy the same God-given freedoms that we Americans enjoy.
That is a dangerous message.
This is the problem with moral relativism. Benjamin Franklin is credited with saying "They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."
In this instance, the essential liberty we are giving up is the liberty of the Iranians fighting for a democratic regime, and the little temporary safety is that which we hope to gain by appeasing an historically violent and defiant regime.
My guess is that we will end up regretting our failure to support those who are seeking those inalienable rights that we hold dear - or at least we used to.