The world is complicated. This policy was established in response to a secondary boycott policy from the Arab League, where any company that agreed to do business in Israel would not be allowed to do business in a member country. Congress judged, I think correctly, that prohibiting companies from cooperating with this boycott was the only way to preserve their broader freedom to choose which countries they do or don’t want to do business in.
There's (still) a way to call this office and snitch on your company if you think they aren't offering services or contracts to Israel that they are offering to other countries. I know the history here. It's still blatantly against the idea of the free market and free expression
