Most likely it's the latter. Sidney Blumenthal writes that Bush is Killing the CIA Salon 05/11/06. The neoconservatives distrust the CIA intensely because its mission involves providing accurate analysis of intelligence to policy-makers. The neocons prefer to pick and choose from bits and pieces of raw intelligence to cook up excuses to attack countries they want to attack. That's what they did with the Iraq War. And it's what they're in the process of doing on Iran.
But with George Tenet, the Bush administration had a CIA director who was willing to go very far in playing the phony-intelligence game with them. Blumenthal writes:
Tenet reassured Bush that the case for Saddam's possession of WMD was a "slam-dunk." At CIA headquarters in Langley, Va., Tenet promised then Secretary of State Colin Powell that for Powell's Feb. 5, 2003, speech before the U.N. Security Council, the information that would be used to prove Saddam had WMD was ironclad. Powell insisted that Tenet be seated behind him while he spoke as visual reinforcement of his statement's unimpeachable character. Yet every piece of it was false, and the humiliated Powell later said he had been "deceived." Tenet resigned on June 4, 2004, and shortly thereafter was awarded the Presidential Medal of Freedom.
But even with an overly-compliant CIA director, the agency still wasn't delivering the kind of war propaganda that Bush, Cheney and Rummy wanted:
But despite urgent pressures to report to the contrary, the CIA never reported that Saddam presented an imminent national security threat to the United States, that he was near to developing nuclear weapons, or that he had any ties to al-Qaida. Moreover, analysts predicted a protracted insurgency after an invasion of Iraq. Tenet, despite the lack of cooperation from the CIA's Directorate of Intelligence, acted as backslapper for the administration's policy.
The White House was in a fury. The CIA's professionalism was perceived as political warfare, and the agency apparently was seen as the center of a conspiracy to overthrow the administration. Inside the offices of the president, the vice president and the secretary of defense, the CIA was referred to as a treasonous enemy. "If we lived in a primitive age, the ground at Langley would be laid waste and salted, and there would be heads on spikes," wrote neoconservative columnist David Brooks in the New York Times on Nov. 13, 2004, citing White House officials and "members of the executive branch" as his sources. Reflecting their rage, he called on Bush to "punish the mutineers ... If the C.I.A. pays no price for its behavior, no one will pay a price for anything, and everything is permitted. That, Mr. President, is a slam-dunk."
Porter Goss was Bush's instrument for exacting the price. But unfortunately for him, his political appointees were a pretty unsavory lot, implicated in scandal. So now he's out, and Bush wants to bring in Michael Hayden to continue the job of making the CIA a loyal Republican propaganda factory, if not destroying it outright. Blumenthal concludes:
Regardless of anodyne assurances offered in his forthcoming congressional testimony, Hayden will preside over the liquidation of the CIA as it has been known. The George H.W. Bush CIA headquarters building in Langley will of course remain standing. But the agency will be chipped apart, some of its key parts absorbed by other agencies, with the Pentagon emerging as the ultimate winner.
The militarization of intelligence under Bush is likely to guarantee military solutions above other options. Uniformed officers trained to identify military threats and trends will take over economic and political intelligence for which they are untrained and often incapable, and their priorities will skew analysis. But the bias toward the military option will be one that the military in the end will dislike. It will find itself increasingly bearing the brunt of foreign policy and stretched beyond endurance. The vicious cycle leads to a downward spiral. And Hayden's story will be like a dull shadow of Powell's - a tale of a "good soldier" who salutes, gets promoted, is used and abused, and is finally discarded.
No president has ever before ruined an agency at the heart of national security out of pique and vengeance. The manipulation of intelligence by political leadership demands ever tightened control. But political purges provide only temporary relief from the widening crisis of policy failure. (my emphasis)