I found a little more about the theory Hadrian chose the name as an insult.

Jacobson 2001, pp. 44–45: "Hadrian officially renamed Judea Syria Palaestina after his Roman armies suppressed the Bar-Kokhba Revolt (the Second Jewish Revolt) in 135 C.E.; this is commonly viewed as a move intended to sever the connection of the Jews to their historical homeland. However, that Jewish writers such as Philo, in particular, and Josephus, who flourished while Judea was still formally in existence, used the name Palestine for the Land of Israel in their Greek works, suggests that this interpretation of history is mistaken. Hadrian’s choice of Syria Palaestina may be more correctly seen as a rationalization of the name of the new province, in accordance with its area being far larger than geographical Judea. Indeed, Syria Palaestina had an ancient pedigree that was intimately linked with the area of greater Israel."

Jacobson 1999, p. 70: "By the fifth century B.C. the term Palaistinē was being used to denote the entire area of the Land of Israel, the traditional area assigned to the 12 sons of Jacob, rather than only the Land of the Philistines or the coastal strip of the Holy Land. Aristotle's location of the Dead Sea in Palestine fits into place without having to be explained away as an inaccuracy arising from second-hand transmission. Also, Hadrian's replacement of Judaea by Syria Palaestina may be seen not so much as stemming from Rome's desire to rub the Jewish nation off the map as from the desire to rationalize the name of the new province, which was much larger than geographical Judaea. From the time of the Maccabees, the territorial boundaries of Judaea had grown well beyond the confines of the Jewish hill country around Jerusalem. What could be more suitable than an ancient name that had long stood for this much larger entity? Besides, any link with the name Israel, tarnished by the Jewish revolts against Rome, had certainly been forgotten."