When I read posts like this I have a series of reactions. I'm specifically refering to my reaction to Boettke's discussino of "the economics of illusion" and the attempt to contrast these people he doesn't like with economic luminaries like Adam Smith and Milton Friedman.
My first reaction is "I can't even take this seriously".
My second reaction is "Well, yes I can take this seriously because I know Peter is a serious guy and perhaps he's just wrong or I'm missing something".
My third reaction is "Well maybe he's serious but he's obviously not taking me and people like me seriously because he continues to say these sorts of things, so why the hell should I give him the time of day?"
If I'm lucky, I come around to my fourth reaction, which is "But he should take me seriously and if he misunderstands me and people like me so badly that he thinks we're peddling an 'economics of illusion' and that he thinks we're somehow out of the 'mainline economics' (Boettke's term) of Smith and Friedman then as much as it's insulting to read claims like that it's really a duty to continue respecting him and collaborating with him and engaging him to set the record straight and clear up the confusion".
I worry, though, about the prospects for this sort of thing. It's obviously not just Austrians and libertarians that do this. Everybody alienates everybody else. And sometimes when there's a narrative that has an important kernel of truth to it (like the "Dark Age of Macro") it's presentation prevents any intellectual progress. There's a good reason why people get so heated - we're going through tough times and compromising with people who we think are blatantly wrong seems like an extremely dangerous game to play. But ultimately, human progress requires intellectual progress, which is why I think it's important to keep engaging people that seem so dismissive of you or your ideas (usually it's not me personally that's being dismissed).
I will note one tough thing about engaging Austrians and libertarians - I constantly have to justify the very idea that I'm pro-liberty and pro-market and it's actually my concerns about threats to liberty and my concerns about misunderstandings about the market that prevent me from being a libertarian. It's aggravating to have to spell this out time and again. This doesn't really happen to libertarians. Nobody second-guesses their dedication to liberty or the market and while you sometimes you get people saying libertarians don't care about the unemployed, it's not an accusation that gets brought up as much. Engaging people who think differently on these issues can be tough because I feel like I first have to demonstrate that I am not scum before getting into any actual ideas (this, I should add, is why trying to avoid blatant rudeness in the blogosphere helps a great deal in getting your message across - you demonstrate that you ought to be taken seriously and you demonstrate that in all likelihood you're not a statist scumbag).
UPDATE: I should say that this sort of thing pays off big time. Bob Murphy was one guy I used to avoid. I think the anarcho-capitalist perspective is particularly likely to presume that they have an exclusive claim to being pro-liberty (even among libertarians), the persistent attention he paid to Krugman (much of which I think is poorly reasoned), and the initial 1920-1921 paper just made me think he wasn't worth engaging in dialogue early on. Since following his blog though, I realized that that was a complete misperception. Even though Bob is one of the people I disagree with most - particularly on political philosophy/anarcho-capitalist type stuff - I've found he's incredibly intellectually curious and also almost never (that I can remember) presumes that there is some antipathy to liberty on the part of people that disagree with him, which makes talking with him much, much less stressful. He's also very open-minded, as the current series of posts on liquidity preference demonstrates. Anyway, respect and engaging people who disagree with you pays off, although there are always lots of barriers that both sides through up - intentionally or not.
UPDATE 2: And I know these "blogging about blogging" posts are dull, but I've gone through those four reactions so many times and this morning reading Peter's post I went through them rather quickly so it was fresh on my mind and seemed worth sharing the idea. If you found this dull, I encourage you to go back and read my zombie post.