The logic behind a decision like this is no different than the logic behind economic sanctions against an entire country. The sanctions like the one that plagued Iraq for 10 years, was supposedly done to target the government or make the people overthrow it. However, it was the citizens that suffered disproportionately as compared the the regime that ran them. Saddams family and his rule suffered comparatively little in that whole time. The Gazans the same. Hamas will suffer little or won't care about it, and the regular people goind about their day will suffer much.
I refuse to believe that every single Gazan man woman and child are purposely harboring terrorists, or can do that against an Israel that is stronger than it. It's like the US allowing......Puerto Rico to bomb it everyday. The international community would look at the US realy stupid for not being able to squash that. Israel could technically go over to Gaza, wipe the people off the map and voila, problem over. I don't think the international community care much about the Gazans as individual people anyway, and Israel has the full support and backing of the US whatever they decide to do, so even if they launched a full offensive against the palestinians in the gaza strip, it would probably be better than torturing them with a "less inhumane" punishment for all. At least a full military assault would be quick.
I'm not advocating a full military strike but, I'm just saying that I don't see how punishing an entire community of individuals, who probably want to live normally, gets rid of the threat of some missiles and a government that was elected but has no real defense against Israel is better than all out war. Israel could crush them all and still get US support so why don't they?