I'm not sure I get your point here. On the one hand you seem to be advocating massive retaliation against innocent civilians for acts of terror (thereby committing another act of terror) while on the other hand you seem to be stating the futility of doing so. And it would, indeed, be futile, adding fuel to the fires which forge these insanities.
No, the only way to stop such things is to remove those who advocate and support them. If a man straps a bomb to his chest and blows up a school, it's not necessarily his village or even his family who should be held responsible, but those who built the bomb for him, and those who paid for that bomb, and those who preached to him that he would receive his reward in some mythical afterlife after committing an act of madness and murder.
The way to stop Hezbollah, or any other radical terrorist organization, is to stop their financing. If they cannot pay for weapons, cannot pay for bomb builders, cannot pay to train their suicide bombers, then they will slowly die off. But this cannot be done passively. It must be handled aggressively and, in many cases, illegally. Bin Laden would quickly lose his power in the terrorist world if the civilized world seized and confiscated his wealth. The money is there, in banks around the world. Probably some of it even here in the US. Find those banks, seize those assets, and use them to compensate the victims of his madness, and see how quickly that madness grinds to a halt. And if a foreign nation decides to finance him in some way, then seize their assets as well. Take the war on terror out of the streets where innocent civilians are being killed and maimed and move it into the boardrooms and throne rooms of the wealthy and powerful. Instead of letting them become even more rich and powerful, make them pay the real price for their greed and stupidity.