Having been to Israel and Palestine, I know that there are two sides to this story; while everyone in American seems to think Israelis are the angels and Palestinians are terrorists, the fact remains that both parties have good right and wrong, and it is wrong for the US to have so heavily backed one of the nations against the other. Their spying operation was probably justified, because the US lacked clarity on what exactly the Israelis were using the drones for, but yes it was a bad move in terms of diplomacy with Israel.
The very nature of spying assures that someone will be offended. In this case, we weren't even stealing their secrets, we were just tapping into the raw data feed. Plus, Israel needs US support more than we need their support. They may not like what we did, but if they had the opportunity to hack our drones you better believe that they would do it with no remorse.
Let's be honest here, most countries would and will spy on each other if they had the chance. It might even be reasonable to assume that you're being spied on by the US because that's just how we are unfortunately, it's not like the US hasn't done this before and isn't doing this right now. It's sad but true, politics makes people paranoid and I doubt other countries would be surprised to find out that the US was/is spying on them.
The fact is, in this day and age you have to keep an eye on everyone. Israel may feel put out by this move, but they don't exactly have a history of treating everyone fairly easy. When you have an ally with a bad record, you have to do what you can to monitor them too.