This is a long post, forgive me…
Since I am no scholar of Islam (and don’t pretend to be) I am utilizing the works of other scholars to support the point of view postulated in the original post. Most of the ideas come from Jamal Badawi’s paper on Gender Equity in Islam and Dr Hassan’s paper on Women in Islam. Weather you agree with them or not is your choice. I think we should keep in mind that traditional scholars were not infallible human beings, they did make judgments which reflected their own normative viewpoints and they made these judgments specific to a certain time period. The intellectuals I am quoting here (and have in the past) are looking to reopen the doors to ijtehad and re-examine Islam and breathe new life into a religion which has been turned into an institutionalized dogma. Here are there arguments refuting the traditional scholars perspective on the exclusion of women leaders:
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The Quranic Argument: According to Canadian Muslim scholar, Jamal Badawi, “[t]here is no text in the Quran or Sunnah that precludes women from any position of leadership, except in leading prayer (however, women may lead other women in prayer), due to the format of prayer…[T]here are exceptions even to this general rule…” (Jamal Badawi, Gender Equity in Islam) . He goes on to write that “[t]here is no evidence from the Quran to preclude women from headship of state. Some may argue that according to the Quran (4:34), men are the protectors and maintainers of women. Such a leadership position (responsibility, or qiwamah) for men in the family unit implies their exclusive leadership in political life as well. This analogy, however, is far from conclusive. Qiwamah deals with the particularity of family life and the need for financial arrangements, role differentiation, and complementary of the roles of husband and wife. These particularities are not necessarily the same as the headship of state, even if some elements may be similar. Therefore, a Quranically based argument to exclude women from the headship of state is neither sound nor convincing.”
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The Hadith Argument: The arguements for exclusion being discussed in this post are the products of hadith. The hadith Asif2 mentioned, actually differs from the hadith in the original post, and is not narrated by Abu Huraya but rather narrated by Abu Bakr (ra), as follows:
"During the battle of Al-Jamal (in which A’isha, the Prophet’s widow, led an army in opposition to Ali, the fourth Caliph), Allah benefited me with a word. When the Prophet heard the news that the people of Persia had made the daughter of Khorsrau their queen (ruler), he said, “Never will such a nation succeed as makes a woman their ruler.” According to Badawi:
“…while this hadith has been commonly interpreted to exclude women from the headship of state, other scholars do not agree with that interpretation. The Persian rulers at the time of the prophet (P) showed enmity toward the Prophet (P) and toward his messenger to them. The Prophet’s response to this news may have been a statement about the impending doom of that unjust empire, which did not take place later, and not about the issue of gender as it relates headship of the state in itself. Z. Al-Qasimi argues that one of the rules of interpretation known to Muslim scholars is that there are cases in which the determining factor in interpretation is the specificity of the occasion (of the hadith and not the generality of its wording. Even if the generality of its wording is to be accepted, that does not necessarily mean that a general rule is applicable, CATEGORICALLY, to any situation. As such, the hadith is not conclusive evidence of categorical exclusion.” -
The Prayer argument - Drawing parallels where they should not exist: (According to Badawi)
"Some argue that since women are excluded from leading the prayer for a mixed gathering of men and women, they should be excluded from leading the state as well. This argument, however overlooks two issues:
a) Leading the prayer is a purely religious act and, given the format of Muslim prayer and its nature, it is not suitable for women to lead a mixed congregation. This point was discussed earlier. Leading the state, however, is not a “purely” religious act but a religiously based political act. Exclusion of women in one instance does not necessarily imply their exclusion in another.
b) Even the matter of whether women may lead prayer is not without exception. Prophet Muhammad (P) asked a woman by the name of Umm Waraqah to lead her household in prayer, which included a young girl, a young boy, and a mu’azzin (caller to prayer–who is always male). " -
The Jurist argument: Al-Qasimi notes that the famous jurist, Abu-Ya’la al-Farra’ (known for his writings on the political system of Islam), did not include among the qualifications of the imam (head of state) being a male. Add to this list the names of Allama Iqbal, Muhammad Asad, Fatima Mernissi, Jamal Badawi, and countless other modern Islamic intellectuals.
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Historical argument:
a) The example of Aisha taking a lead role in the battle of the camel.
b) In the incident of Al-Hudaybiyah, Umm Salamah, a wife of the Prophet (P), played a role equal to what we would refer to today as “chief advisor of the head of state.”
c) The Prophets relationship with the women in his life (Khadijah and Aisha in particular) does not coincide with the conclusion that women should be excluded from the position of leaders.
d) Other strong Muslim women figures include the Prophets daughter Fatima and wife Zainab - both were actively involved in public affairs (to name a few). -
Gender Equity in the Qur’an argument: Men and women are equal in the Qur’an. This is stated on countless occasions. “Indeed, the Qur’an is full of verses affirming the equality of women and men. I defy patriarchy’s theologians to reconcile these verses with any bias against women or even relegation of women to a sheltered – that is, inferior - status,” or denial of the right of Muslim women to lead the Ummah (Dr. Rifat Hassan):
Never will I suffer to be lost
The work of any of you,
Be he male or female:
Ye are members, one of another
[Surah 3:Al-'Imran:195]
If any do deeds
of righteousness, –
be they male or female –
And have faith,
They will enter Heaven,
And not the least injustice
Will be done to them.
[Surah 4:An-Nisa’:124]
The Believers, men
And women, are protectors,
One of another: they enjoin
What is just, and forbid
What is evil: they observe
Regular prayers, practice
Regular charity, and obey
God and His Apostle.
On them will God pour
His mercy: for God
Is Exalted in power, Wise.
God hath promised to Believers,
Men and women, Gardens
Under which rivers flow,
To swell therein,
And beautiful mansions
In Gardens of everlasting bliss.
But the greatest bliss
Is the Good Pleasure of God:
That is the supreme felicity.
[Surah 9:At-Tawbah:71-72]
Whoever works righteousness,
Man or woman, and has Faith,
Verily, to him will We give
A new Life, a life
That is good and pure, and We
Will bestow on such their reward
According to the best
Of their actions.
[Surah 16:An-Nahl:97]
For Muslim men and women, –
For believing men and women,
For devout men and women,
For true men and women,
For men and women who are
Patient and constant, for men
And women who humble themselves,
For men and women who give
In Charity, for men and women
Who fast (and deny themselves),
For men and women who
Engage much in God’s praise, –
For them has God prepared
Forgiveness and great reward.
[Surah 23:Al-Mu’minum:35]
- There were no women Prophets Argument: (According to Badawi)
The absence of women as prophets or “messengers of Allah” in prophetic history is due to the demands and physical suffering associated with the role of messengers and prophets and not because of any spiritual inferiority attributed to women. Societies, to which prophets were sent, including the Israelites, pre-Islamic Arabs and others, were largely patriarchal societies. They probably would have been less responsible to the ministry of female messengers of god. In fact, they made things extremely difficult for male messengers.
Conclusion by Dr. Hassan:
"Centered in God and self-critical, the original Muslims believed that although God had given them the Qur’an and the Prophet
had exemplified its teachings, it was their responsibility to implement its message in the “Islamic” societies that they were
creating. These Muslims read the Qur’an as an “open,” rather than a “closed,” text and strove continually to understand its deeper meaning. This intellectual striving (“ijtihad”) – which Allama Muhammad Iqbal, poet-philosopher of Pakistan, calls “the principle of movement” in history – made the Muslims of the first three centuries dynamic and creative peoples who paved the way for the European Renaissance.
It is a profound tragedy and irony that today’s Muslims, in large numbers, regard Islam in monolithic terms and regard the
“shari’ah” (the code regulating all aspects of a Muslim’s life) as fixed. In much of the contemporary Muslim world, we see the
substitution of traditionalism for the exercise of ijtihad – even a denial of the right of ijtihad.
To me, being a Muslim means renewing the cry of the modernists, “Back to the Qur’an and forward with ijtihad.” In the same vein, it means acting on these words of Iqbal: “The teaching of the Qur’an that life is a process of progressive creation necessitates that each generation, guided but unhampered by the work of its predecessors, should be permitted to solve its own problems.” These are useful guidelines today for the liberation of all Muslims, especially women, from traditional
authoritarianism…
The challenge for contemporary Muslim theologians who uphold gender equality and justice is to analyze and refute time-honored understandings of certain Qur’anic verses and ahadith that have been used against women. Their task is to reinterpret these texts in the light of the cardinal Islamic belief that God is just and that God’s word must reflect God’s justice."
Islam is not a religion of oppression, its a religion of liberation. Why legitimize the oppression of half of our population through the use of weak narratives which go against the grain of Islam. Its time to rid ourselves of these crutches and learn to walk on our own.
Achtung 
[This message has been edited by Achtung (edited March 03, 1999).]