Because it's been a deliberate tactic of De-development

The blockade and Israel’s repeated military offensives have had a heavy toll on Gaza’s essential infrastructure and further debilitated its health system and economy, leaving the area in a state of perpetual humanitarian crisis. Indeed, Israel’s collective punishment of Gaza’s civilian population, the majority of whom are children, has created conditions inimical to human life due to shortages of housing, potable water and electricity, and lack of access to essential medicines and medical care, food, educational equipment and building materials.

• Amnesty International Report pg 26-27

Other reports about how Israel is an Apartheid State: Human Rights Watch Report, B'TSelem Report with quick Explainer

The Israeli imposed closure on Gaza began in 1991, temporarily, becoming permanent in 1993. The barrier began around Gaza around 1972. After the 'disengagement' in 2007, this turned into a full blockade; where Israel has had control over the airspace, borders, and sea. Under the guise of 'dual-use' Israel has restricted food, allocating a minimum supply leading to over half of Gaza being food insecure; construction materials, medical supplies, and other basic necessities have also been restricted.

Gaza Policy Forum summary: Experts agree that Israel’s dual-use policy causes acute distress

Through 1993 Israel imposed a one-way system of tariffs and duties on the importation of goods through its borders; leaving Israel for Gaza, however, no tariffs or other regulations applied. Thus, for Israeli exports to Gaza, the Strip was treated as part of Israel; but for Gazan exports to Israel, the Strip was treated as a foreign entity subject to various “non-tariff barriers.” This placed Israel at a distinct advantage for trading and limited Gaza’s access to Israeli and foreign markets. Gazans had no recourse against such policies, being totally unable to protect themselves with tariffs or exchange rate controls. Thus, they had to pay more for highly protected Israeli products than they would if they had some control over their own economy. Such policies deprived the occupied territories of significant customs revenue, estimated at $118-$176 million in 1986. (Arguably, the economic terms of the Gaza—Jericho Agreement modify the situation only slightly.)

• page 240

In a report released in May 2015, the World Bank revealed that as a result of Israel’s blockade and OPE, Gaza’s manufacturing sector shrank by as much as 60 percent over eight years while real per capita income is 31 percent lower than it was 20 years ago. The report also stated that the blockade alone is responsible for a 50 percent decrease in Gaza’s GDP since 2007. Furthermore, OPE (com- bined with the tunnel closure) exacerbated an already grave situation by reducing Gaza’s economy by an additional $460 million.

• Page 402

The Gaza Strip: The Political Economy of De-Development - Third Edition by Sara M. Roy