It is probably a generalization to speak of Islamiphobia as endemic in the West, as it is not; there is probably no more distrust and fear of those who practice Islam in the West as their is a similar feeling of Western Religions in Islamic areas. However, to attempt an answer:
Distrust between Islam and Christianity can be dated back to the Crusades, when numerous atrocities were committed against Muslims by those acting in the name of the Church. That distrust has continued throughout the ages. The Western world is primarily Christian, which considers itself the only true religion, as does Islam. For a number of reasons, Europe and the West advanced technologically more quickly than the rest of the world, and eventually imposed its system of belief on other areas, including areas which were Islamic. A number of Islamic extremists responded violently, including with suicide attacks. Such a death is considered glorious in Islam but anathema in Christianity. People of the West have sadly generalized the acts of a few to all Muslims, thus resulting in the distrust of which you speak.
I think there are two factors that cause Islamophobia; western factors and Islamic factors. I don't think Islamophobia can be simply re-labelled as western racism. Simple, basic racism is a part of Islamophobia, but it is not the only factor. It is a mixture of factors.
9/11 plays a big part in this topic. Islam is currently in a 'hot' phase and it is determined to defend its territory and expand where possible. Islam is not always a religion of peace and around the world we see dozens of groups killing in the name of the Koran to gain political control. Many Muslims are extremely intolerant of other peoples' values and they want to create hard-line totalitarian theocracies. That is scary. Very scary. Non-Muslims are frightened by this intolerance.
When a small newspaper in Denmark published some cartoons of the prophet Mohammed, the reaction in the Muslims world was violent and non-multicultural. They demanded the immediate death of the cartoonist, and several attempts were planned and attempted. Embassies were burned, editors were threatened, people died. Islamists said it was 100% unacceptable for non-Muslims to behave in a non-Muslim way. (But it seems that it's perfectly OK for Muslims to make equally offensive cartoons and statements about Jewish culture or western culture.)
Islam is a very fundamentalist religion. It is not used to being questioned or ignored. It is not ready to share the cultural space. But western culture is expanding fast via the internet and satellite and there is a big crash of values in progress. Traditional Islam believes it has the right to dominate without dissent. Western values utterly reject that claim.
I would say that there is a difference between hating muslims (which is ugly racism) and disliking Islam (which is an acceptable political choice). But the term 'Islamophobia' seems to include both these groups. I think we need to separate these two groups and create new labels for them.
There is another word that is becoming heard more often... Islamofascism. It is a word that has some relevance. I am not a racist just because I dislike the increasingly vocal desire of some Muslims for absolute, totalitarian power over their neighbors.