I believe KP has already flagged he is reviewing his further participation in this IPL, and presumably the next ones. I should emphasis I said "if" - obviously we don't know exactly what happened yet, and may never.
You can have imperfect information but be told by your boss that its fine to play and that there'll be no further discussion of it unless you want to quit. Obviously you still have a choice, but with what I understand of how the contracts are phrased, they have you over a barrel. You aren't "made" to play, but you still feel pressured into making the choice you do. If, and again, I repeat I'm saying "if", then it would leave a bad taste in their mouth, and make them have a think about whether or not they stick around.
As to whether Sachin set a good example or not, who do you think was more sensible - the guys from Mumbai or the RCB ? Because as I understand it, two bombs DID actually go off, and a third one was only discovered after that. At what stage does it stop being a matter of being "cowardly" and become "sensible"? For mine, it was surprising that after an at least partially effective terrorist attack on a venue, in which people were injured, it would be quite reasonable to at least delay the match for a bit longer than an hour or two.