One of the best arguments that I have read about keeping diplomatic channels open to Iran is "Iran will never be the same again", Huffington Post, Meir Javendanfar and Dex Torricke-Barton, 2009-07-07.
If someone calls you a Great Satan, the best thing you can do is to appear as a Good Angel. If you show calm in front of a tirade, who will come off looking better. Despite Iran being a sham democracy, the Iranian government still has to deal with the people. Remember, the Iranian people have already put their government on shaky ground. Diplomacy is a good opportunity to win the hearts and minds of a people.