The United Nations and Palestinian Statehood

If the U.N. were to take some action toward upgrading their opinion of Palestinian statehood, some Israelis have advocated "punishing" the Palestinian Authority. Why? Who cares what the U.N. calls Palestine (West Bank and Gaza Strip)? The realities on the ground will remain the same if neither side changes course. Perhaps it will put Abbas in a stronger position with his own people, allowing him to make some of the concessions needed to come to an agreement with Israel or avoiding premature real statehood responsibility. Perhaps it will remove the urgency of creating a real Palestinian state, allowing it to continue to grow economically to reach a position where it will more likely behave as a good partner with Israel (which seems to be Netanyahu's plan?). The only loser would be the U.N. which would be pushed to the side by reality.