I agree with you broadly here, but there are even more subtleties to this whole story that many have missed.
First, Israel and Judah were mostly long gone by the time Jesus came - Israel, the true israel of God, were scattered to the four winds and into every nation of earth (from whence they shall be called) some time between the old and new testaments. Many think the ten tribes headed north and west, and ended up as britain, western europe and america, but this is a side-issue.
So who are/ were the people in palestine/ judea then and now? While some were obviously descendants of the twelve tribes, many were edomites, moabites and ammonites, as they are today. Impostors, in other words. They are certainly not imitations of God's only begotten Son, are they?
Also, a minor point, but although Jesus' prophecies were both about 70 AD and His second coming, His words 'this generation' when translated properly from the greek, read as 'this generated oracle' ie - 'this prophecy' shall not pass till all these things, etc.. makes more sense now doesn't it?
All praise and love to our Father in heaven and His Son, the man Christ Jesus without whom I have no hope.
RE: To my Christian brothers & sisters: On what do you base the idea that the modern-nation State of Israel is still "God's chosen people?"