I'm skipping a lot of the debate that has gone on in the last 12 pages, though I have read it. Things have wandered off topic a bit and I'll just address the original question.
Nationalism can indeed be a dangerous thing, and the 20th century has two of history's worst wars (in terms of deaths and material destruction) to prove it. No matter where you go, every country has its nationalists who have somehow reached the conclusion (through the usual simplistic "Us vs. Them" logic) that their country has some quality or group of qualities that makes it righteous and entited to land, actions, resources, privilages, etc. that others do not "deserve". We all know them, we read their heavily-distorted self-aggrandizing versions of history, we recognize their arrogance and danger to peaceful society.
Still, that is really just the outter extreme of nationalism. In Europe's transformation from a feudal, medieval society based on estates and aristocracies to one based on a much more egalitarian and empowering society, the nation-state was born. The nation-state called upon a majority of its citizens (if not all) to parttake in the state as a sort of corporate governance that began to provide universal services to its citizens, and act in their interests. It should be remembered that for all human history so far, the nation-state has proven the most effective means of providing services like manditory universal education, waste disposal, environmental regulation, healthcare, defense, etc. No other form of human political organization has overseen such a massive rise in living standards and improvement in the quality of life as the nation-state has. The nation-state has engineered our modern societies and all the wealth and prosperity that we enjoy. All that came before the nation-state did this only for a tiny elite, usually less than 10% of the population, leaving the rest to spend their lives in a fashion described once by the British TV historian James Burke as "short, nasty and brutish".
I strongly support such efforts as the EU as the only sane way to temper the excesses of nationalism but as a supra-national government the EU is still experimental and has great weaknesses in many critical areas, where it must still stand back and allow its component nation-state members to act unilaterally. For instance, the inability of the EU to formulate a comprehensive or coherant foreign policy has greatly hindered its influence abroad despite its economic power, and one often finds EU member states acting at odds or even against each other on critical foreign policy issues. The EU is a great step forward and I look forward to a day when EU-style supra-national governments can effectively govern, but that day has not yet arrived.
The nation-state created a new identity for humans, transcending the older medieval estate-based identities. As I pointed out in another thread, the early 16th century Hungarian aristocrat wrote a declaration as a preamble to a new law (after a nasty peasant uprising) that began "To the Hungarian Nation..". He did not mean all ethnic Hungarians or all subjects of the Hungarian kingdom; he meant all nobles of the Hungarian kingdom - including ethnic Croats, Germans, Ruthenians, etc. who held titles of nobility in Hungary - but he excluded all non-noble people (peasants, merchants, craftsmen, etc.), regardless of whether they were ethnic Hungarians or not. The "Hungarian Nation" in 1514 meant only the top 2-5% of the population by titled birth, and excluded 95-98% of the kingdom's population. This was the medieval way of looking at identity in Europe, and the nation-state changed that radically. It's because of the nation-state that the overwhelming majority of the folks enjoying the debates in these forums (yours truly included) are indeed participating in these forums, rather than rolling in pigsh*t as peasant tenant farmers with life expectancies capping at around 30-40 years.
Yes, nationalism (the glue that holds the nation-state together) does have its excesses and we need to develop ways (like the EU) that keep them in check, but I think discounting nationalism altogether for its weaknesses would be to forget the immensely positive developments it has fueled in our societies, rather like throwing the proverbial baby out with the bath water.