What this means is that if you take medical radioactive waste or other radioactive material and combine it with conventional explosives, detonate it, and if it is detected — no one is going to enter that city again for a long, long time.
It is not so much the actual destructive aspect of the explosion, but the spreading of radiation in an area that people fear. The resulting socioeconomic impact is what does the damages.
The same could be said, for instance, about the spreading of anthrax spores in an outdoor setting.
The above is a low-tech way to have maximum impact.
See this NBC News item: “How easy is it to get the material to make a dirty bomb? Very, report says.”
There are so many ways that domestic or foreign terrorists can have a significant negative impact on the United States.