Perhaps. Probably deserves action at some point...
Ken, that simple sentence probably best sums up my overall concern with my pet rock. We have increasing piracy off Somalia, we street gangs that are getting more and more powerful (not just in the U.S.), we have narcotrafficers who have well trained and equipped militias that are more than a match for most law enforcement agencies around the world.

In Mexico I think an argument could be made that the drug cartels are in fact waging a quasi-insurgency, because they are vying for power (control) with the State over certain geographical areas to facilitate their business, but they don't want to overthrow the entire government. Their concern is not taking over Mexico, but creating the conditions to facilitate business. However, if that involves killing off good cops and judges, and buying off bad ones, then that is a form of subversion intending to effect control of at least part of the government.

Your argument is still correct, by the legacy definition you posted, that is still not an insurgency, but then again this isn't your grandfather's mafia either. The nature of the threat has changed, and in the end the one point we can probably agree on is that these elements present an increasing threat to our national interests and the safety of our citizens in some cases.

Back to the definitions and my concern with them. Words not only have meaning, they are associated with authorities and perceptions. If we fall back on defining the problem in N. Mexico as a criminal threat (it is, so you wouldn't be wrong), then it is a law enforcement problem, even if it is beyond their capacity to suppress. The military can provide limited support. On the other hand if the threat is defined as an insurgency (only in cases where appropriate), then that implies that other authorities could be implemented if our nation wanted to take more decisive measures to suppress the problem.

A perfect definition would be nice, but we're all used to working in gray areas. I don't want to spend too much time tripping over definitions, they are what they are, so I'll close with your point, this threat requires more action than we're applying to it now.