You severely underestimate Hezbollah's goals.
The question is whether the goals of the military action are justified.
The goals of the present conflict are for Hezbollah to shoot as many rockets as possible into populated city centers to kill as many civilians as possible; and for Israel to uproot the terrorist infrastructure, missile launching pads and the terrorists themselves by using intelligence gathering and precise bombing.
Hezbollah's goals aren't to kill as many civilians as possible. In thinking so, you're painting yourself into a corner.
Hezbollah has several goals in the present conflict:
1) Force Israel to negotiate the [link|http://www.voanews.com/english/2006-07-17-voa15.cfm|release of prisoners]. Their public posture is that Israel has refused to negotiate the release of Lebanese prisoners, so they "have no choice".
2) Steal some of the press attention back from Hamaas.
3) Open a 2nd front on Israel.
4) Take pressure off Iran about its nuclear activities, and force the US to directly negotiate with Iran.
5) Demonstrate that the US must deal with Syria for there to be any stability around Israel.
6) Goad Israel into over-reacting to strengthen Hezbollah's position with the Lebanese Shia population, and thus in Lebanon, while simultaneously causing international opinion to again turn against Israel. If Israel attacks severely, it shows that Hezbollah needs arms to defend Lebanon. If they don't, it shows that Nasrallah is a great leader who can stand up to Israel. Either way, Nasrallah wins.
If you only see Hezbollah as a group of bloodthirsty terrorists who want to murder Israelis, then you'll never choose to act in ways that further Israel's long-term interests. Separate the goals from the tactics. You've got to understand their goals even while you condemn their tactics and even while you argue against them achieving their goals.
Few disagree that Israel has the right to kill those people who are attacking it, and everyone understands that Hezbollah is operating from civilian areas. Few are arguing that if Hezbollah sends 10 missiles into Haifa, then Israel should only send 10 missiles back. That's not what people mean when they talk about proportional response.
The problem is that Israel seems to feel that dropping leaflets and saying "we're sorry, but it's their fault" when Lebanese (or [link|http://www.canada.com/nationalpost/story.html?id=6d361bec-134b-4993-99ca-5addb300c450|Canadians] are killed or, when [link|http://www.theglobeandmail.com/servlet/story/LAC.20060720.MIDEASTLLEBAN20/TPStory/TPInternational/Africa/| a UN compound is shelled] is sufficient. It's not. Many of us recognize that Israel is in a bad situation, but only Israel chooses the targets that it attacks. Saying that Israel is only attacking Hezbollah or "strategic" targets just excuses every mistake on the IDF's part. Bombing highway bridges and airports isn't going to stop rockets from hitting Haifa. It punishes civilians - the people that must ultimately be on your side for there to be peace - while doing nothing to affect the capabilities of the small bands who are firing the rockets.
Flattening southern Lebanon isn't going to get rid of Hezbollah nor get Israel back its soldiers. Israel needs to adjust its tactics and recognize that the IDF and IAF aren't the be-all and end-all of its future security. It can no-longer expect peace simply by defeating an enemy.
It's not 1967.
What happened to the IDF of [link|http://news.bbc.co.uk/onthisday/hi/dates/stories/july/4/newsid_2786000/2786967.stm|Entebbe]?
Cheers,
Scott.