Well, the original long term plan, was that Israel would be the west's civilizing proxy in the Middle East.
Until that comes to pass, it has been useful in the following ways:
1) Passing intelligence information to the west from all of eastern europe, the middle east, and the former Soviet Union.
2) Doing paramilitary work for the U.S. in Central America, Guatemala, Angola,etc.
3) Testing our weapons systems. Also, wonderful little Iraq/Iran game for a while.
4) Attesting to our humanitarian defense of "the most uniquely oppressed people in the world."
5) Showing the Arabs where they stand in the grand scheme of things.
6) Best army in the middle east.
Joanna