How can the same country that prides itself in their intel/spying prowess, and has demonstrated sophisticated capabilities and attacks, claim it will be helpless if they don't absolutely disappear another group of people and take their territory?

I seriously doubt the Oct 7 attack caught Israel by surprise, given the scale of it and the level of compromise Israel had on Hamas. Given the disproportionate response Israel was prepared to employ, it was a perfect casus belli to appropriate even more land, as it is happening right now.