Yassin's death will create a power vacuum that will weaken HAMAS and by proxy the other terrorist groups that run the occupied territories. Maybe at some point the bloodbath that needs to happen in the OT will let the palestinian people see that freedom is born out of terrible consequence.
I hold no brief for Yassin, so I'm not sorry no see him go. But I really don't think your analysis holds water.
Even Jewish Israelis that I've met admit that a 'might makes right' attitude is pervasive on both sides. Bloodbath, after bloodbath has already occurred. They have only strenghthened Palestinian resolve. The problem, as I see it, is that there is no place other than terrorist groups to which Palestinians can direct that resolve.
Only Israel can provide that new area to which Palestinians will marshall their efforts. Israel must show the Palestinian that peace can be more effective than war in achieving their goals. Only a Geneva style process -- where all the benefits of Palestinian statehood are laid out in advance -- can give that kind of hope.