AFAIK, in most of the EU, and in many of federal states in the US, 'holding the ladder' for a thief trying to enter a home through the window, is equal crime to actually climbing that ladder and emptying the house. In some it's punishable to even turn the other way without alerting security services. Or isn't it?

So, if one declares a war on the Daesh, and then looks the other way and bombs the JAN or some empty houses while the Daesh is slaughtering Kurds in Kobane and forcing 160,000 others to flee to become homeless refugees in Turkey.... what shall one think about this?

Should somebody happen not to care about Kurds: well, imagine the outcry if the Daesh would force 160,000 Israelis to flee their homes....?

Now, I have no doubt that some might say, 'hey, that's a part of the strategy, called 'let them rot' and designed to let the extremists ruin their reputation between the locals on their own which in turn should prompt the locals to act on their own. Theoretically, this sounds great, especially when supported by articles like the following one: The U.S. Can’t Destroy ISIS, Only ISIS Can Destroy ISIS.

However, sad fact is that this article contains a number of illusions, i.e. theories that - to put it mildly - are simply not supported by facts one gets when taking a closer look at the situation there (in Algeria). Specifically:

...During the early 1990s the Algerian government fought one of the nastiest civil wars in recent history against a broad-based Islamist insurgency. The Armed Islamic Group (GIA) conducted a brutal insurgent campaign employing vicious terrorist tactics on par with today’s modern menace the Islamic State of Iraq and the Levant (known by the acronyms ISIS, ISIL or IS for Islamic State – you pick the one you like). GIA attacks were often indiscriminate and violent; involving large civilian massacres – quite ISIS like. While I always reserve extreme caution in endorsing any counterinsurgency or counterterrorism tactic utilized by the Algerian government, there may be one instructive lesson from Algeria’s strategy that we in the West and particularly the U.S. might examine for designing a plan to counter ISIS.

The Algerian government, having already tried extreme brutality and overwhelming force, recognized the need to employ smarter tactics. Rather than tracking every GIA member to ground and in so doing causing harm to locals and further bolstering GIA’s popular support, the Algerians selectively employed what Luis Martinez, author of The Algerian Civil War 1990-1998, describes as the “Let Them Rot” strategy. The Algerian government, Martinez explains,“sought to avoid human losses for non-strategic zones, but also to lessen the demoralizing effects of the ‘dirty job’ on the troops.” (See pg. 150.) Algerian security services isolated districts with Islamist sympathies leaving the GIA emirs to govern via Islamist law and principles. Contained by the Algerian security services, GIA emirs employed their extreme practices and quickly alienated the local populace as the district, walled off from the rest of society, crumbled economically. Over time, the districts and the GIA emirs that ruled them, slowly "rotted" creating conditions favorable for the development of local militias to combat the GIA. Local businessmen and disillusioned Islamists were re-engaged over time by the Algerian government who offered employment through security positions and opportunities through economic development plans. In the end, the Algerian government didn’t destroy the GIA in these selected districts, they instead let the GIA defeat itself.
...
Call it 'hair splitting' if you like, but:

1.) Use of 'extreme brutality and overwhelming force': this was something that in nearly 95% of cases happened spontaneously, i.e. not on order from above, and not as a part of strategy, but because units involved were seeking revenge for massacres committed by Islamists.

Even so, and although much-reported, such cases remained few in total numbers: under immense pressure from various European powers the authorities were doing whatever is possible to show that they are respecting human rights. Or how else would author like to explain a high number of Islamists that were arrested - and then released too, after a few months (all provided the author happens to know about this fact) - or the fact that Islamists found themselves 'embedded' with the population and convinced the security forces are afraid of them, in quite a few places and for quite a long time?

2.) Algerian authorities, 'sought to avoid human losses in non-strategic zones, but also to lessen the demoralizing effects of the 'dirty job' on the troops.'

It's now anything between 10 and 33 years since this war, and Algerian military and security services are in the process of retiring dozens of thousands of troops that were involved. And thousands of these are suffering immense psychological problems: this is not so because they were involved in 'dirty jobs', i.e. massacres, but because they have seen with their own eyes what the terrorists were doing to the population while in their teenage.

Perhaps author would like to check his data on this issue before jumping to conclusions?

3.) Perhaps the most important part: 'Algerian security services isolated districts with Islamist sympathies leaving the GIA emirs to govern via Islamist law and principles'.

Frankly, in nearly 15 years of research about this conflict, I have never heard about such strategy/tactics. If anything of this kind has happened, then not as a part of strategy. Surely, Algerians would isolate specific districts and sometimes do so for several months. However, this happened because they lacked troop strength to go in, mop up and secure the area.

Before anybody comes to the idea to complain that I'm making this up because it simply cannot be that the Algerians were lacking numbers: one of issues with the Algerian military is that - for obvious reasons (corruption, favourising etc.) - troops are not permitted to serve in their region of origin unless they have eight years of service in their books; i.e. all the active troops (including officers, of course) have to serve 'far away from home' for eight years, before they are permitted to re-deploy close to their area of origin. Except one does not know about this fact, it should be obvious that this practice/regulation has caused quite a number of problems with deploying specific units around the country during that war.

Because of this problem, the authorities began organizing a sort of armed militia that was responsible for protection of their homes/villages/towns, that knew the local people and terrain etc.

Thus, quite on the contrary: it can be said that the Algerian military did precisely the same mistake like the French in Algeria before, i.e. was deploying inexperienced conscript troops on a terrain unknown to them for most of the war.

Therefore, any impression about 'isolated districts and letting the GIS to rot' is based on theories of somebody who has studied this conflict from very, very far away - to put it mildly.

Now, before somebody comes to the idea to ask me, 'then how to hell did the Algerians then win, actually?' Well, they began deploying professional troops (primarily special forces) in ops supported by helicopters and advanced ELINT/SIGINT assets for actions against specific, carefully selected terrorist leaders. With these out, and with the population well informed about what the terrorists were doing to it, the rest was 'easy' (well: kind of), or at least a 'matter of time'.

Furthermore, the 'letting the Daesh rot' idea is simply bad, and this for several reasons. Firstly, Daesh is already in deep problems with large parts of local population. It's not only that various Sunni tribes in Iraq are turning against it, but there was already an armed uprising against it in Dayr az-Zawr (and this only few months after it occupied this area), as can be read here, here, here (just for example).

Reaction of the Daesh is always the same: mass slaughter.

Thus, I would say that there is simply no time to 'let them rot': if one gives these idiots enough time, there will be nobody - especially no 'local population' - left to save.