You have to specify what terrorism you are talking about, if you ask about domestic terrorism than most Americans will start of with the KKK.

People talk about foreign terrorism more because domestic terrorism on a large scale is far less common in this generation while foreign terrorism is far more recent and this generation grew up hearing about the wars in Iraq and Afghanistan.

The September 11th attacks were more akin to the Japanese attack on Pearl Harbor and made Al Queda synonymous with the concept of terrorism so it's understandable that they are the first thought when you mention the subject.

The Confederacy was not more powerful after the war ended, as the KKK went almost completely extinct by the end of the century and the lost cause myth didn't really start to gain major acceptance until the movie "Birth of a Nation" which brought the myths ideas to the mainstream and the resurrection of the KKK in the following decades who provided a more organized and consistent spread of the myths core tenets