My argument didn't deal with multi-national entities in which one people/nation/ethnicity oppresses others, true. In the cases of Israel and Apartheid South Africa, said dominant people just happens to have European roots (we recently discussed elsewhere about the many Israeli Jews with Middle Eastern or African roots, but the ones who founded the country were still overwhelmingly Ashkenazis), but of course there are also cases like Nigeria, Myanmar, etc. where the struggle is/was entirely between different native peoples. Though on that point, the former colonizers often actually encouraged such local strife based on a 'divide and conquer' mindset, including to some extent even the UK in Israel/Palestine in the Mandate period...
Cynics? Rather too naive idealists, I'd say.
For what it's worth, it's often pointed out that the combination of both positive and negative Israeli influence has made the Palestinians among the best educated and in some ways most liberalized Arabs. Their Christian and Druze minorities, like in Lebanon, may also have played some role in that - forming sort of a bridge between different cultures. So they might have some advantages over the likes of Saudi Arabia or Iran - but then, they'd be far poorer and surely still destabilized by their violent history. So indeed, I'm not too optimistic about what the government of a free Palestine would look like.
If I'm really dreaming about utopian solutions, personally I think that ultimately a single state for both Jews and Palestinians would be the best for all involved - but in the real world, that seems even less plausible than a two state solution.