Most comments here are attacking the decision, or just quoting the decision, and following it up by a "wtf". Just being shocked is not an argument. Jews are or have been persecuted in all middle eastern countries. What would happen if they were a minority in a democratic state in the Middle East? Why would it be different than in the other democracies in the Middle East? Laws like these lower the probability of Jews…
As to your question, I don't think a wise Israeli government would make every Palestinian a citizen tomorrow, but I think it is deeply unwise and immoral to further entrench the current policy of legal apartheid. The Israeli-Palestinian conflict will end in either ethnofascism and ethnic cleansing or some form of reconciliation, and this is a step towards ethnofascism.