It's worth remembering that Hezbollah as a whole is more than just the paramilitary branch which is commonly referred to as a terrorist organization. Some entities (like the EU) only considers the paramilitary arm of Hezbollah as a terrorist group, while the rest is a proper political organization.
Like always, things aren't quite as black and white as many want it to be.
Same with Hamas, really. At this point anything either organization does basically violates the "just war" (oxymoron, I know) tenant of only attacking an enemy when you believe you have a reasonable chance of success.
I'd want all militaries to disarm too, unlikely to happen unless everyone starts to agree to not get into everyone else's business.
So besides getting everyone to disarm, what could we do?
There are probably some exceptions to this rule, and yes, their occupation of the West Bank violates international law, but attacking just no longer works. Gaza lies in ruins and the IDF conducts operations in the area at will. There are currently thousands of people wrapping their electronics in aluminum foil in Lebanon. Disarming and sitting down to talk in brokered negotiations is probably more effective at this point.
And that decision is much more political than it is legal or rational. Imagine arguing that ISIS officials are off-limits because they're "not paramilitary".
Hezbollah's occupation & control of southern Lebanon is against international law in the first place, but nobody actually wants to deal with that problem. I've never seen a comment that criticizes Hezbollah violations of UN Resolution 1701 the way that people criticize Israel.
Is that right? Then their flag on wikipedia is even funnier. It screams "Islamic terrorists".