There are loads of things wrong with this. For a start, it assumes that terrorists aren't being addressed - they are, that is why there has been four "successful" Sunni / takfiri plots in twelve years, with considerably more foiled and vast efforts devoted to ensuring that people don't fall for the belief in the first place.
Secondly, you describe internment running the risk of "flushing out" even more - that isn't the experience of Ireland; people were radicalized because innocent people were locked up. Interning people would result in creating more terrorists, not "flushing them out".
Finally you make the mistake of believing this fundamentalist crisis wouldn't be ended with a negotiated peace. If the situation in Syria, Libya and Iraq can be settled by talks, IS itself would be finished. Don't forget that most of the reason why the tide has turned against them (over the past year and a bit) is because everyone else is talking to each other - admittedly they are at the "we won't shoot you if you don't shoot us" stage, but even that is allowing a very limited co-ordination of effort.
If you can then build on that and get better relations with the more reasonable states in the region, calm the situation down and allow peace and prosperity to take root, then it wouldn't be too long before the people of a different country who ultimately inspire and fund this madness get overthrown.