Because the israeli public cannot stomach what needs to be done. Every time an israeli soldier is scratched, there is a 5 page eulogy about him in the media. It's not just the government that doesn't have resolve it's also the army and general public. The only time jews could fight was in the 30 year period following the holocaust
Israel would need a leader that is willing to forgo all foreign travel for the rest of his or her lifetime as well as possibly the lifetimes of their children. Any leader who would do what needs to be done would be labeled a war criminal for life and their children would be in danger any time they traveled outside of Israel...not to mention what they would face from leftists inside Israel. They would have to be totally content to dwell in the land forever and accept being hated by a large portion of Israel. They probably couldn't even go to funerals of relatives outside the country. Also, Jews could not really travel after the military and do the things like backpacking in south america etc...after a real destruction of Hamas, however the opposite might be true and some European countries who hate Islam might admire them and welcome them.
This might be ok if Israel was a lot bigger and there was space to roam immediately next to Israel.
In my opinion, a leader with the stomach to really wipe out the 'palestinian terrorists' would have to be a really different type of character, bordering on extreme zealot and willing to face ostracism from mainstream society. I think he would have to be like Bar Kochba or ancient Maccabbees who lived on the run. I don't like Bibi very much but he does seem to represent the majority viewpoint in a lot of ways. The state leader must represent the interests of Jews both inside and outside of Israel. But yeah it is pretty lame that he sent supplies to Gaza...that is like the ultimate mercy towards a wicked enemy. I don't even know what to say about the whole situation except that it is depressing.
I think the future of Israel might be private militias or independent settlements that have their own paramilitaries who would gun down any entity trying to uproot them. Or maybe the way is to simply be observant of Torah laws and stay away from the military as much as possible like the Charedim. Hmmm...if only the right leader would arise and give Jews the right framework to live within...