An ethnostate generally is a bad, illiberal idea, but concerning Israel, the ideas that are good in terms of ideology would have been, and possibly still would be, worse in practice.
The existence of Israel as an ethnostate is more down to the ethnic preferences of others in Russia¹, Germany, multiple middle eastern countries², and elsewhere³, than the ethnic preferences of jews.
Most of the jews I have known in my life are liberals who see Israel as a refuge against illiberals, not supremacist weirdos that get attention on the internet.
¹ https://en.wikipedia.org/wiki/Kishinev_pogrom
² https://en.wikipedia.org/wiki/Jewish_exodus_from_the_Muslim_...