There are plenty of ethnostates in that region (Arab Muslims have about 20 of them), so I don’t consider it a special crime against humanity that there be one for Jews.
This is a tired argument that ignores the fact that the Palestinians don't just have a generic "Arab" identity that would make them feel equally at home in Morocco or Saudi Arabia. While they are Arabs, their identity is also specifically tied to the land of historic Palestine, and any reasonable solution to the conflict has to acknowledge that.