I think that you are right that the cost is too high compared to other cheaper alternatives, like reconnaissance aircraft on the Israel side. Keeping the images blurred removes the free option so military on each side has to spend resources on the problem. I am however skeptical that it fully stops anyone from getting access to mapping data.

I am a bit surprised however that there would not be more satellites that is commercial operated. I keep hearing about old weather satellites that gone past their period of commercial operation in favor of newer ones, and the old ones still having decent cameras and other sensors to provide maps of buildings and structures. With about 6000 satellites currently operating around the earth there should a pretty steady stream of old ones being replaced, and I would think many of them do get reused for new purposes.