Of course we (Americans) realize the many problems that come with funding Israel. Many of us would like to end that relationship, but like you note, the military-industrial complex is strong. When we stop worrying about short-term threats like oil spills or terrorism, and start thinking about structural issues that plague our system (campaign funding, corporate personhood, etc.) we might actually have a chance at fighting back. Keep in mind that a democracy might be a fair system, but its one that changes and adapts very slowly. We've gained the benefits of being able to never fear having a dictator, but that has some at the expense of extremely slow reaction.
U.S. sanctions Russia's state-owned arms exporter Rosoboronexport (Reuters)
from the article: U.S. official: More U.S. aid will help Israel make 'tough' decisions