Its an extreme form of scare tactic, and one that could possibly succeed.
These people are attempting to show that if even an innocent woman who is now an Iraqi citizen and who worked tirelessly for the Iraqi poor is up for kidnapping and possible execution, then those with a direct connection to the coalition forces will meet with no mercy. If Margaret Hassan is executed, then clearly NO ONE is safe, especially those whose appearance gives the impression that they are citizens of coalition countries.
I doubt if her captors give a damn about her good deeds. If executed, she serves the purpose of scaring off all foreign nationals.
Atheism is Myth Understood.