Because it's THERE, not merely because of anything it has done. Israel is located smack dab in the middle of Dar el-Islam, "the House of Islam", meaning all land conquered by Muhammad and his followers. According to Muslim belief, no non-Muslim entity is allowed to exist in the House of Islam, unless it is subjugated to Muslim rule. And since Israel is not subjugated to Islam, and flaunts its Jewishness and independence, it is HATED, oh boy is it HATED! No territorial concessions on Israel's part are going to diminish that hatred, until Israel's eastern border becomes the Mediterranean.
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Facebook's Mark Zuckerberg to give away 99 percent of fortune ($45b) to charity (AP)
from the article: America's Mideast woes don't begin and end with Israel