I like your article. I'm not sure Arendt's right there--I think each generation is new, no matter how many came before--but I like the argument.
As for "I don’t belong to any group. You know the only group I belonged to were the Zionists," note the past tense. I suspect much of her disappointment with Israel came from seeing the perversion of the state she had worked so hard to create.
I don't think it's too late for Israel or any country. But so long as Likud is in power, I'm not optimistic.
The failure to realize this condition of Arendt's made me especially sad: "Elimination of all terrorist groups (and not agreements with them) and swift punishment of all terrorist deeds (and not merely protests against them) will be the only valid proof that the Jewish people in Palestine has recovered its sense of political reality and that Zionist leadership is again responsible enough to be trusted with the destinies of the Yishuv."