I absolutely love that law. Why would I ever care what happens to some kafir who disrespected someone that I love more than my own parents (peace and Allah's blessings be upon him) or my religion which I cherish more than some house or car or family.
Imagine someone insulting your own mother, it would make you mad right? It would make us Muslims hate you 70 times more than you would hate someone to slap and insult your own mother.
Imagine if your own house burned down, your car got stolen, and your entire family got killed, you would hate that right? We Muslims would hate that our own religion be slandered by some filthy Mushrik more than we would hate these things to happen.
Likewise, THANK YOU YA ALLAH for legislating this penalty against blasphemy (which is capital punishment), it is a boundary. First the kafirs stop paying jizya tax, then they start opening up more churches, then they start calling people to their fake idolatrous religions, then they start blaspheming the Prophet (s), then they start insulting those who believe in the Prophet (s) then we end up in Syria, Yemen, Afghanistan, etc.
All out war, so blasphemy is simply a boundary. We don't go from sharia to oppression in one day. We go from A to B, then from B to C, then from C to D, all the way to W, which war. And blasphemy is a very VERY important boundary that no Muslim should ever want to be crossed.