I have previously encountered Islamic apologists who claim that the dhimma is a thing of the past, or should be, that it should be abolished in Iran and not restored elsewhere. Unfortunately, acknowledgement that its traces remain all over the Islamic world, and that nowhere in the Islamic world today do non-Muslims enjoy full equality of rights with Muslims, are harder to come by. Even harder to come by are Islamic arguments against it. However, the Norwegian Kafir has kindly sent me this one: “Dhimmitude and Jizyah: Non-Muslims under Islam” by Mohammed Faisal Aslam in Muslimreviewer.com.
Aslam is refreshingly honest in admitting that it is still the mainstream view among Islamic scholars that the dhimma should be imposed, with all its institutionalized discrimination against and harassment of non-Muslims:
▪ Shibli Numani states in his famous autobiography of Imam Hanifah, that according to the respected Imam every non-Muslim should wear a thread that shows that the person is a non-Muslim. Maulana Numani also states that Imam Shafi held the opinion that non-Muslims, who are neither Christians nor Jews, cannot live on land that is ruled by Muslims. 
▪ A contemporary Wahabi scholar, Sheikh Muhammed Salih Al-Munajjid, argues that non-Muslims, who are not Christians, Jews or Magians, can be forced to “accept” Islam because that will allegedly lead to their happiness and salvation in this world and in the Hereafter. 
Even more moderate voices don’t want to do away with the idea of a religion-based tax, or discrimination on the basis of religion:
More moderate conservative views can be found on Islamonline.net:
▪ A fatwa published 24. February 2002, states all the jizyah amounts are to be a financial obligation placed upon those who do not have to pay the Zakah. As the ratio of these two taxes is the same, it is obvious that the jizyah is simply a technique used by Islamic governments to make sure that everyone pays his fair share. If the term jizyah is too offensive to non-Muslims, it can always be changed: Umar Ibn Al-Khattab levied the jizyah upon the Christians of Bani Taghlib and called it sadaqah (alms) out of consideration. 
▪ A fatwa by Dr. Muzammil Siddiqi, published 21. October 2002, states that all non-Muslims are to be considered dhimmis. Hindus, Buddhists, etc. are also entitled to the same protection that is given to the Ahl al-Kitab (People of the Book, i.e., Christians and Jews). They are also entitled to have the freedom to practice their faith. 
There seems to be a crucial difference of opinion among the conservative scholars, ie those who emphasize tradition and anxiously try to stay inside the mainstream. Indeed, there is a big difference between providing someone with protection or killing them for rejecting a religion. The uncompromising stance of Sheikh Al-Munajjid contrasts sharply with Dr. Siddiqi’s fatwa. Both scholars refer the readers to the Qur’an and events in the past, yet they end up with radically different conclusions. This is because the revelation is divine, but interpretation is human and fallible.
Then comes a commendable attempt to rule out the jizya and dhimmitude altogether:
AN ALTERNATIVE EXPLANATION
The most reasonable explanation of the subject matter I have come across is the one propounded by Moiz Amjad, the academic behind Understanding-Islam.org. In his opinion:
…Jizyah is not a universal tax imposed on non-Muslims for all times to come. Jizyah, according to my understanding of the Qur’an, was restricted to the rejecters among the direct addressees of either the Messenger (pbuh) or his companions. 
Mr. Amjad’s argument revolves around the concept of Itmamu’l-Hujjah (ie unveiling the truth to the extent that no one has an excuse to deny it). The argument is that when God sends a Prophet (Rasul), the Truth is proven to the direct addressees beyond doubt (see the Qur’an 4:165). Hence, the Prophet has the right to punish the adressees if they refuse to conform after the Truth has become manifest to them. Imposing jizyah was one of the ways the Prophet Muhammad (peace and blessings be upon him) punished the people of the book.
After the Prophet Muhammad (pbuh), the Sahaba (companions who knew or saw the Prophet) with the institution of Khilafah, were able to represent the truth in its most perfect form. In fact, Itmamu’l-Hujjah was passed on to them after they were declared Ummah Wasat and shuhada ala’l Nas (see Qur’an, Al-Baqarah 2: 143, Al-Hajj 22: 78). After the companions of the Prophet (pbuh) no group or individual holds the position of performing Itmamu’l-Hujjah. Accordingly, the jizyah tax is no longer applicable. Neither can a non-Muslim be punished for not accepting an invitation to Islam.
No individual can do Itmamu’l-Hujjah now because no individual can claim that his propagation has manifested the truth to the extent that no excuse is left to deny it. It was only the Prophets (peace be upon them all) who manifested the truth. When the truth became manifest, those who rejected it were punished. The Noble Qur’an is full of such stories (for example, the story of Prophet Saalih and the people of Thamud), but most people fail to realise their significance.
The rejecters of Muhammad (pbuh) were warned repeatedly by the Qur’an. The Qur’an declared that Muhammad (pbuh) was not merely a messenger, but also a sign of God’s Justice. Its prediction of the manifestation God’s Justice was fullfilled upon its direct addressees within the life time of its presenter. Like the previous nations in which God sent His messengers, the rejecters among the direct addressees of the last Prophet (pbuh) were subdued and disgraced in the life of this world.
Moiz Amjad’s explanation, which is based on the work of his mentor Javed Ahmed Ghamidi (who in turn is a student of Amin Ahsan Islahi), may be in contradiction with what the traditional scholars have stated, but it is strongly supported by logic and reasoning. I venture to say that it is a completely legitimate interpretation.
I hope this argument is indeed accepted as legitimate and gains wide currency among Muslims. I must say that that seems unlikely, since I doubt that Muslims in general will accept the idea that “no individual can claim that his propagation has manifested the truth to the extent that no excuse is left to deny it” or that “it was only the Prophets who manifested the truth.” That idea undercuts the Islamic belief that the Qur’an is perfect and manifests the truth, and that if an unbeliever is exposed to it and rejects it, his guilt remains.