Everything is good in moderation.
If your country has pride and well, nationalism, the people will support it more. They'll pay taxes, join the military, and help their country a lot more then if they didn't like their country. If they have too little nationalism, will they won't do a thing for their country. If they have too much nationalism, well look at your post.
Also to the post above. That's not nationalism. That is Radical Islams. That is their religion. Has nothing to do with their country, or pride in their country.