Civ would have problems with Israel from a number of different angles as far as I can see.
Chiefly, Israel is somewhat of a political nightmare of a topic and immediately subjects you to bad press. How do you represent them? Are they religious, are they militaristic? No matter how you do it, you're going to anger someone and that gets you bad press which is easily avoided.
All you need is an AI Arabia or AI US attacking them due to simple AI mechanics, and now you've got a video showing how Friaxis are against Israel. If I was leading the design team, I'd tell them to leave it out and work around it rather than deal with politically hot headed Youtubers putting your game out of context and kicking you over it.
Civ, or rather the Civilopedia, is a wonderful resource which breaks the history of wonders, improvements, units and civilisations down into a remarkably well represented version of history. With Israel, you have the same problem as above. Were they a Civilisation for 5,000 years, or were they formed in 1948? Do you lament over how that piece of land has been fought over and conquered so many times that trying to claim that there has been a coherently stable civilisation there the whole time is a bit of a stretch, or do you distort history for something that's more politically (and therefore commercially) safer to represent, but perhaps not entirely true.
So you're either risking your integrity or your reputation. Either way you're risking bad press, there's no win scenario for that one as far as I can see.
(Moreover, I trust we can all imagine the outcry as screen captures of Tel Aviv being the founder of X,Y, Z religion make their way out of context around the globe. "What is this game that denies Israels identity?")
The impact on history is undeniable, but it's box, best left closed from a commercial perspective I would hazard a guess.