1. More Germans than Americans died in WWII, does that make them a big bully? You really can't decide moral questions on whose side had more deaths; Israelis are just better at keeping their people safe. Not surprising when terrorists actually try to gather civilians in places where bombs are falling, a great boon to their public image and an easy way to save their own skin.
2. The obvious political cost of attacking schools and businesses is not lost on me. It probably isn't lost on the Israeli military either however, and I highly doubt they did so out of malice or because they hate brown people. Given reports at the time of terrorist stashes and militants hiding in schools and hospitals, it's clear that there was some objective purpose for the bombing, although to call it mishandled and a debacle is to be generous. And I'm not saying that the ends justify the means; I'm merely saying that you can't criticize their intentions, only their execution.
3. I can concede to that; white phosphorus was a bad choice. However the military response was not disproportionate; all targets were military and terrorist, and there's evidence in vast abundance of the overwhelming majority of civilian casualties being due to Hamas actions, not Israeli ones (i.e. the human shield bit, and I've got YouTube videos of that if you're curious).
4. Obama actually did defend the Israelis. Perhaps you'll recall a speech he made at the time, about if some terrorists attacked America from the Mexican border, that we'd be demanding their heads on a pike. And it wasn't a war, at least not between states. Israel has no beef with Palestine, just its terrorist groups (the aforementioned Hamas).
5. In a practical sense, Israel does have the power to act in its own interest. Thing is they would be facing the entire UN coming down on them with sanctions and other penalties, not a very good position for a country that is literally surrounded by countries whose constituencies are still calling for Israel's annihilation, even when their governments desire friendly cooperation to take down rising power in Iran.
I would like to stress that I'm not saying that Israel's plan there was infallible; I'm sure there are ways that could have been handled better, without the international media and public outcry. I'm sure there was a way to minimize casualties. Just realize there is another side to the story.