Don, I think I understand your question, and though not Muslim I've had enough conversations regarding it with Muslims to think I might be able to address your first question which it seems still hasn't been quite grasped.
As I understand it, Islam teaches (not just in the Qu'ran, but also in the hadith) that the Injil is a message given by Allah to Jesus for him to share with the Jews of his day. This is what should have been written, but the New Testament preserves a different message than that of Jesus -- blame it on Paul who started twisting things. Nonetheless the first Christians (other than those influenced by Paul) were true followers of Jesus' real message and thus were by definition followers of Islam. Sometime after that and before the council of Nicea the whole thing got corrupted. Even the writings of people like the Apostle John were changed to reflect the heresies of Paul, and other writings that should have been kept in the New Testament were scrapped by these same leaders of the church that were now no longer following Islam by heresy. So, when the Qu'ran speaks of the people of the Book as a reference to Christians, "the book" the Qu'ran is referring to is the original message of Jesus that should have been written down and that part of New Testament which was altered and scrapped by later leaders in the church. Of course it is recognized that some of the New Testament is still good and correct, but that trying to determine which parts are good and which parts are not is impossible without the original to compare it to, the best way to tell today is to compare it to the teachings of the Qu'ran. That which does not agree is bad. That which agrees is good. And that which is still undetermined is undeterminable and thus not trustworthy. The people of the book only had this book until the time of the Qu'ran, so they are given grace to submit as best as they could until a more perfect revelation is made available to them. Once they have this true message shared with them they are then accountable to how they receive it, and they need to turn away from that which has been corrupted. This latter concept when applied not to people, but to books would be reason enough for those that do outlaw the Bible to outlaw it as somethng which is haraam and harmful to those who might be misled from Allah by its false teachings.
Now, we will let the Muslim members of this board correct any concepts which I may have stated in error. Then if I have properly understood your question you will have your answer.