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Netanyahu's government doesn't want there to be any reconstruction. The only thing more dangerous to them than a hard line Palestinian government is one willing to negotiate. The worse the conditions Palestinians are in the more militant they will be. This let Netanyahu justify being more aggressive.
Yes, one more cynical man would say that they kind of intentionally let the destruction and the casualties to be so high, so that they can justify the retaliation which would involve a couple of times more civilian casualties on the other side and they can use this as pretext to tighten their restrictions and increase the buffer zone or simply grab that land for themselves.
It doesn't even have to be some intentional diabolic plan. There is no incentive to be a moderate in this conflict. Moderates have historically been killed by their own side. There would have been peace several times over if this was not the case. This conflict has devoled to the point that any move to the center will result in political suicide and possibly real suicide.