Yes, it is a holy place. I don’t think anyone disagrees with that. If someone is able to live a holy, fulfilling, happy life there, kol hakovod, ashrecha. But sometimes their government gets in the way (to put it mildly) of Shmiras Torah uMitzvhos. If someone is able overcome these issues, he should definitely should live there.
One must be able to differentiate between Eretz Yisroel and ‘Israel’.