Based on everything I've read, you are quite correct about the immediacy of Saddam's threat, but it's an incomplete picture, we can agrue about the degree to which it's a distortion of the situation at the time.
As best I can piece together, and just reading through whatever public materials I can find when I've got the time for such matters, it's seems pretty clear that the U.N. sanctions against Saddam were falling apart. It also appears to me that Saddam had directly violated numerous U.N. sanctions.
It also appears that Saddam had the intentions of reconstituting his WMD programs, at least if you can believe the words coming from George Piro on the 60 Minutes interview. It is also apparently that Saddam had significant ties to various terrorist organizations, including Islamic Jihad, now known as al Qaeda, as well as Hamas.
So when you begin to paint a picture of Saddam, it's not a picture of a benign threat, but a picture of a potentially lethal threat. I'll concede that we've got to use the word "potential"; but it's not an unreasonable projection by any means.