Your logic makes no sense, if people are using IST as a hub why can't elal cash in on that in flying people to IST?
People could care less about where the hub is, IST is incidental.
The amount of people originating IST-TLV is miniscule.
The point is that TK has brought cheap fares to the US-TLV market and people will always gravitate to the cheapest option.
LY would gain
nothing from flying to IST. There is no market to be captured there. They still have the same ridiculously high cost structure with too many employees that cost too much and get too many benefit for the airline to be competitive in a global economy.
They need to stop the blame game, improve their product (they're the only US-TLV airline without lie-flat business class, etc), improve their mileage program (the only profitable part of US airlines) and lower their cost structure to better compete.