The Economist has published a couple of good pieces that put the threat of Cyber war in context.
While the scope of the threat is disputed by many experts, there are enough credible examples of Internet attacks and sabotaged software to raise eyebrows.
The Economist provides this sobering assessment:
Cyber-weapons are being developed secretly, without discussion of how and when they might be used. Nobody knows their true power, so countries must prepare for the worst. Anonymity adds to the risk that mistakes, misattribution and miscalculation will lead to military escalation—with conventional weapons or cyberarms.
President Obama has outlined a plan to deal with the possibility that foreign powers, terrorists or others with nefarious designs could penetrate sensitive computer systems in the U.S.
In May of last year, I wrote a small feature for NPR looking at how experts viewed the situation. Interestingly, the ones I spoke to dismissed North Korea's capabilities just two months before Pyongyang was blamed for a massive cyber assault on arch-nemesis South Korea.
As another piece in The Economist points out, perhaps the earliest example of this kind of warfare resulted in a massive explosion at a Siberian oil pipeline in 1982 that was witnessed by U.S. surveillance satellites.
According to former Air Force Secretary Thomas Reed, the Soviets had stolen computer control software for the pipeline from Canada but were unaware that the CIA had encoded a "logic bomb" in the programming that "after a decent interval … reset pump speeds and valve settings to produce pressures far beyond those acceptable to pipeline joints and welds." Ouch.
At the time (June 1982), Reed was serving in the National Security Council. In his memoir At the Abyss: An Insider's History of the Cold War, he described the result as the "most monumental non-nuclear explosion and fire ever seen from space."
Reed implies that the incident, which he says resulted in "significant damage to the Soviet economy" contributed to the fall of the USSR.
"In time the Soviets came to understand that they had been stealing bogus technology, but now what were they to do? By implication, every cell of the Soviet leviathan might be infected. They had no way of knowing which equipment was sound, which was bogus. All was suspect, which was the intended endgame for the entire operation."