What is "doing fine?" Islam without the bothersome Infidel? Islam all by its lonesome and Islam in small cloistered enclaves may be doing fine, but when it becomes a serious player in a modern polity the problems immediately arise.
The more specific the question gets, the more general your answers become.
This is exactly about liberty being restricted, not about "critical masses" (whatever that might mean in reality) or "national identity" (as if that's up to goverment to define).
Renaming a direct and obvious infringement on religious liberty as a national struggle for existence is something that governments do to justify oppression. There's no reason as should be copying their methods here.