As it now stands, Israel is (for the most part) a successful, democratic, market-based, non-corrupt society and nation. The religious right has too much influence over some aspects of daily life. But other than that (and it should be fixed), I gather (and I don't know; I've never been there and I haven't studied Israel) it's a pretty reasonable place for most people to live — even non-Jews.
If I were a secular Israeli I would have three main fears about a possible one-state solution.
- The state would deteriorate into a Islamist state.
- The militias of the various Palestinian factions would not disarm, and the state would deteriorate into violence.
- The state would become increasingly corrupt as has happened in the areas controlled by the Palestinian Authority.
Here's an interesting NPR commentary entitled "Does Hezbollah Stand for Arab Pride?" by Adeed Dawisha, a Professor of Political Science at Miami University of Ohio and author of Arab Nationalism in the Twentieth Century: From Triumph to Despair.
Put it another way. How many current majority-Islamic states would you be willing to live in? From what I know (and, again, I haven't lived in any majority-Islamic states, and I haven't studied majority-Islamic states), my impression is that most (there must be some exceptions; Lebanon was moving in the right direction, but Hezbollah and Syria weren't helping) majority-Islamic states are undemocratic, corrupt, and repressive. I wouldn't want to live there. The fear is that a one-state solution would convert Israel from a relatively successful open liberal democracy into a repressive, undemocratic, corrupt society. Why would any society want to take that sort of risk?