Not Jewish myself but married to an Israeli; it was explained to me like this:

- There are rules, passed on to humanity from God.

- God is perfect.

- Therefore if you find a loophole in the rules you are not outsmarting God or anything like that, God is Perfect and cannot be outsmarted by mere mortals.

- Therefore if you find such a loophole, you are not committing some form of heresy as most Christians would see it. Rather, you are extra virtuous because you found the loopholes that God put there as "easter eggs" for those of His followers that were attentive and clever enough to spot them.

- Repeat this for several millennia and you get the New York fishing line shenanigans.

I'm not sure I agree with some of the axioms, but I must admit that if you accept the first few points then "New York fishing line" follows pretty much linearly from those. I also quite like the idea that mortals cannot "outsmart" a deity by finding loopholes, because the idea a human could outsmart God always seemed like the very height of hubris to me. Then again, I am a (drunk) atheist so my opinions about gods are probably not too reliable. :)

Why not just go with "God is perfect, but humans aren't, so maybe we just misunderstood the laws?"

He knew what we'd understand and how we'd interpret these laws when he wrote it that way and left the wording exactly like this anyway. If he really didn't want people having Eruvs in their cities, he'd have defined walls and houses better.

All knowing by necessity means knowing about the loopholes we'd exploit, or he's not all knowing.

Yes well, by that argument anything we choose to do at all must be part of God's plan and hence Good™.

It’s more like a tie-breaker for religious rules disputes favoring personal and societal freedom: something like

“if you don’t have a clear example indicating how something’s bad, it’s probably Good Enough™ “

The fishing line is one of my favorite things in the world.

I know that most people (including me) generally view it as silly loopholes, but I recently read a perspective on this that sorta makes sense in my head.

Basically, if you believe that god is omnipotent and omnipresent, then surely he is aware of those loopholes. Which might indicate that he left them in purposefully, so that people could use them.

While it seems shaky, it follows certain logic there that makes some sense to me as a non-religious person.