I always thought that it was handled better in the book, Norsefire's (and Susan's) rise to power. In the book, like you said, the people themselves were afraid, and in their fear, allowed Norsefire to rise to supremecy, which allows for stuff like Norsefire. This is how it happens in real life, e.g., Hitler. In the movie, there's a convoluted backstory that tells it in reverse, with the concentration camps coming first (which, and lets be honest, folks, wouldn't go by without notice in the way that it does in the movie), then the "virus,"(which is the film's version of the nuclear conflict, I guess.) and so on.
I enjoyed the movie as a whole, but I wish they would have stuck with the comic's backstory.