The Westminster System is the ur-example of modern democracy and it was the system of government by which Great Britain came to dominate the world. The hyperbolic moaning about how an Israeli government under that system would be the end of democracy simply exposes the utter intellectual incoherence of the socialists who dominate this board. Most of you do not care a whit about the constitutional order, you simply dislike the Israeli state and desire to see it governed by fools of your ilk.
An Israeli government under that system is not one which this reform would produce, since it'd still disenfranchise millions of Palestinians.
The biggest root of the current set of problems is, as mentioned upthread, misalignment of the electorate and the society. Large numbers of Haredis are quite insulated from society and get the vote; large numbers of Arabs suffer all the worst aspects of Israeli society without suffrage. As these portions of the population grow relative to the population as a whole, the government will grow further from society.
At the end of the road is Lebanon, if changes aren't made.