How does having military discipline and values create bad civilians, in any society?
In a modern 'open society', your success hinges on how well you do learn, study, achieve, and you may one day end up in a job where you work less hours for more pay. Each man in modern society in an individual.
A conscript military operates on the reverse principle. Work harder, and the army transfers you to harder duty, with (still) miniscule pay. Pretend to have a health issue, or make problems for your commander, and (after some prison time, say two weeks) you will be remanded to easier duty, or 'thrown out' of the service.
You are, of course, not an individual in the army, and they do expect obedience. A draftee army operates on the principle of 'do stuff or I punish you', as opposed to capitalism's 'do stuff and be rewarded'.
Of course, in the REAL Israeli Army, what really happen is that it's far more important to make sure you're not responsible for a failure rather than to ensure success so you have people who don't really care if their work is done well, who show up late, who are overall lazy, rude bums.
And then they go into the public service.
A conscript army, especially one on the IDF model, is a miniature exercise in socialism.
It might make for a stronger economy but what use is an economy if the country is under the heel of its enemies?
I believe you skipped my point. A huge army made sense when we were surrounded by enemies on all sides, and expecting a joint military invasion by Egypt, Jordan, Syria, and every other naiton in the region all at once at any moment. That's no longer the case. The key enemy of Israel are terrorists, against whom a giant army doesn't help. There's just no longer a point of maintaining a state of emergency.
Furher, a long-term state of emergency CANNOT be maintained.