It's hard for me to say whether or not the President ever really thought- or continues to think- that there is any real possibility for lasting peace and democracy in Iraq. I have mentioned before that I waver between imagining him to be either a complete idiot, dazzled by his own power and blind to all criticism, or a sneaky little bastard who is wise to all the nasty machinations in D.C. and beyond. But whichever he is, the possibility does exist that the decision to invade Iraq was, indeed, based on the idea that establishing a democratic state there would be a very strategic move. From an economic, geopolitical and military standpoint (that is, from the perspective of any garden-variety Neocon), a Western-style democracy in Iraq would be a good thing for America. Not only would such a state be more amenable to sharing oil reserves and allowing a permanent military presence, but it would make further inroads for Western free-market capitalism and culture in an area that obstinately refuses to play by the rules made by America the Superpower.
Further, there are few who can really deny that removing Saddam from power was a good goal to have. Probably not the best use of our time and effort, not really our job, and not one to be executed in the idiotic way that we did it, but the removal of this asshole was not a bad goal at any rate. A start. A jumping off point for establishing the aforementioned free and democratic state.
But like everything else, this administration took a strategically good idea and tried to achieve it in the wrongest, most ham-fisted way that it could.
This administration went into Iraq with absolutely no strategy outside of the notion that America Always Wins and expected that notion to carry the day. There were no long-term plans, no expectations of consequences. Just an idea: a democratic Iraq (and, of course, the tasty oil reserves and military bases that the supposedly grateful Iraqis would let us have). The Bush administration went into Iraq with all the foresight of the Underpants Gnomes.
A free and democratic Iraq would have been nice. And in all honesty, we probably had all the resources needed to establish such a thing. But in their seemingly bottomless hubris, this administration refused to tap those resources (or at least, to tap them in a pragmatic way, Mr. Rumsfeld), refused to listen to those who understood such things and effectively destroyed all possibility of ever actually seeing that goal to fruition.
Yes, a free and democratic Iraq would have been nice. But so would a Sudan free of genocide. Or a France free of racism and anti-Semitism. Or a China that fully respected human rights. Or an Africa that has enough to eat and doesn't lose all of its adults to HIV/AIDS. Any one of these things would be a great goal. But you can't just assume that your firepower and track record will result in the acheivement of any goal. Especially when the leader of the current mission has an absolutely perfect record of taking golden opportunities and promptly mucking them up beyond all repair.