You have some good points nuckles but I think it's really just the difference of a establish or federal army, fighting a guerella type force. Large armies can never really win that battle, like the U.S. in Vietnam or Russia in Afghanistan, both 'industrial age' wars by your definition.
Add to the fact that war in that region only fuels the anti-Israel/anti-west feelings. Kong brings up a good point too. The enemy is hiding amongst civilians. These are tactics that guerella fighters and forces use. Their nearly impossible to wipe out, especially if you are trying to limit civilian casualties. (I don't know how hard Israel is trying, but that's another thread)
You've got a point in new technloogies helping them out and increasing their successfulness but really when it comes down to it. Their fighting a guerella war and those tactics are very old and very successful verses a larger enemy. I mean, a guerella force could never take over or occupy something, that's not what you use it for, and that's when you need a real army. But it can defend something very well, and it's nearly impossible to root out. It also is great for hit and run strikes to damage or confuse an enemy.
Hezbollah could never conquer Israel in a military sense. But it can damage, confuse, anger and weaken it. And then defend itself and continue it's existance.
P.S. Besides luckyboy, wow do you have to be a Canuck fan to get in on this post?
Thought I'd venture in here for Flames fans, hahaha.