Pretty much everybody has issued travel warnings about Indonesia. Australia has the strongest. But what surprises me is the naivete of some people who have been living in Jakarta for less than a year and feel obliged to comment on the travel warnings as if their few months in Jakarta had given them some kind of mystical insight into the security situation of the entire country. Its irresponsible to fob off travel warnings as a racist rants; Indonesia just isn't that secure. It may feel secure in Jakarta but Jakarta is only a single patch on the whole mosaic that is Indonesia. Things may look a whole lot different in Kalimantan, Sumatra, and Bali.
There have been improvements. It is getting better security wise. However there are still unresolved issues in Aceh, Ambon, Timor, Kalimantan, Sulewesi, Papua, and Timor. The police have done a good job in tracking down terrorists but Noordin M. Top (one of the main characters and recruiters) has yet to be found. Who knows where he is. There is still a porous border between Indonesia and the Phillipines which is home to training camps for insurgents, as well as a supply house for weapons and materials. The large turnout for the Bali Bombers funerals indicate a level of grassroots support for their actions. Even Jakarta is not immune from unrest. Just a few months ago Jakarta's resident thugs were out in force to break up a pro-tolerance rally. Several people were injured and police waited until well after the event before making arrests. There is still lots of room for improvement.
Goverments will always err on the side of caution when composing travel warnings for their citizens. Its sort of a cover-your-ass thing looking to the worst case scenario. As long as nobody is forbidding travel to Indonesia I don't see a big problem in a travel advisory. I'm not saying that people should not come here. I'm here after all. People should however be fully aware of the risks involved in travelling to a foreign country before they go. It is their right as citizens and the obligation of their governments. To claim that Indonesia is perfectly safe just because you had a good evening in the clubs is just... well... irresponsible.
Travel Advisories for Indonesia can be found here, here, and here