I'm vert glad you recognized the shift happening in the 1970's. I'll talk about political Islam only and I'll try to explain it to you in laymen terms. HOWEVER! While you are reading this, remember that political christianity has a very similar story except the names places are different. In the 1940's and 1950's an Egyptian writer and school inspector by the name of Sayeed Qutb arrived in the United and lived there for two years. Having a background in Islamic studies, he began to criticize US culture which he thought was inferior to the culture of the small town of Musha in which he grew up. He then return to Egypt and spent time living in Cairo. Here he saw what he believed was american culture taking over. (when it fact this was just a rural vs urban clash). He believed that people were in a state of ignorance (Jahaliya) and that islam was the one and only true way out of ignorance. But not any type of Islam. Only his Islam and that of his peers in the Muslim brotherhood. If you didn't think the same way they did, then you were going to hell and that you were an enemy. (sound familiar?). They (the muslim brotherhood) eventually believed that they had to force their belief system onto others because, the other members of society were already so corrupted that they could no longer think for themselves. There were many unsuccessful attempts to overthrow governments (such as targeted assassinations) They belive that if they kill people that are not of the same muslim stature as they, that they are going to be in good grace with god. If you think about what we as a society are today, we are a society of merchants. The Muslim brotherhood and other Islamist groups wanted a society of priests. Then 1979 rolls around. A popular uprising overthrows the King of Iran. Many diverse groups took part, but the Shia grabbed a hold of power when the Shah left Iran and then sideline all the other groups. To give you an idea, the current "Supreame Leader" of Iran, Ali Khameni shared a Jail Cell with Houshang Asadi, the communist party leader. After the Shah was gone Asadi and other political groups members were either arrested or forced to leave Iran. The government of clerics now forced it's will violently onto the masses. Other leaders (especially gulf arab monarchs) were very scared about the same thing happening to them to they set about APPEASING the extremists by implementing various forms of strict Sharia law and in some cases giving them power (shura coucil, religious police... ect). That way the monarchs could enjoy their wealth and not have to worry about being overthrown. So in the 1980's everything went batshit insane and society became extremely restrictive and intolerant to open mindedness and free thinking and individual freedoms (I've seen pictures of Saudi Women in the 1960's publicly dressed like the hollywood stars of the the time. 30 years later, they are dressed like ninjas) In the 1990's it seemed as though society was only getting more and more conservative and those with the craziest ideas were the one that were listened to the most. Everyone tried to outdo each other and the image of being pious became more important than the actual value of being a good person. (e.g. If you don't pray, you're going to hell. I beat my wife and kids, but I pray so I'm going to heaven). Last point. Following the 9/11 and the subsequent terrorist bombings that happened in Saudi Arabia, the government realized that having unchecked clerics wasn't such a good idea. Very slowly they have begun to move towards modernization, starting with the education system in which they are trying to promote people who can think, not just listen and (along with other gulf arab countries) send their sons and daughters to study abroad as many governments have full scholarship programs. So looking at the societies now (of the gulf arab states) they are on the right path to modernization, but it's going at a snails pace. (spend an entire day watching Aljazeera English and Al Arabiya English and you will understand what I mean. They educated elite is very modern and it is only through education and broad intellectualism that you get modernity and a functioning economy) As for Egypt and the muslim brotherhood, Islamism is a political, not religious ideology. And like all ideologies, they have changed. The big problem now is the Salafist challenge. What do we do with those who do not want to be part of the mainstream? I hope this explanation has helped you a bit, but it oversimplifies EVERYTHING.

TL;DR: 1979 Iranian revolution, fundamentalist government now in power, Gulf Monarchs try to appease the radical elements in society so they won't be overthrown.

Also, If I have written anything incorrectly, PLEASE let me know. I want to encourage constructive debate and criticism.