As someone who travelled a lot and stayed in many hostels let me say I also saw similar behaviour in many places, not only hostels but also on buses and at tourist sites. This is not limited to South America, but also happens in South East Asia and India.
When speaking to Israelis who travel alone and are usually a little bit older they confirmed my observations and are ashamed of their countrymen and try to stay away from Israeli groups themselves.
In many cities in South America there are hostels specifically for Israelis, while certain other businesses refuse to deal with Israeli clients at all.
My thoughts on the reasons:
Any group of people travelling together are prone to do their own thing and care less about other travellers than people travelling individually.
If the group consists of young men (and also women) in their early 20s, its even more common to party and "misbehave".
If you go to any beach holiday resorts in the Mediterranean or places popular for binge-drinking you will see tons of young Germans, Brits, Dutch and Danish (among others) people 'misbehaving' badly. The same is true for North-Americans at spring-break in Florida or Mexico.
So why do we travellers see this mostly with Israelis? All young Israelis have to do military services for three years (women have to do two years). After this time (which is very regulated as in any army) many of them just don't go to the beach for a few weeks, but take six or twelve months to travel around the world (mostly in cheap places because they haven't earned much money yet). In many cases with their friends from the army.
So imagine you are young, just did three years of hard military service and now travel with your friends in foreign countries and want to have fun. You don't give a s**t about anybody else.
Don't get me wrong, I don't like their behaviour and I think they should be more considered, but I'm trying to explain where I think they are coming from.
As for what to do about it?
Hmmm, I don't have a good answer.
As I said before I talked with single Israelis about this and they all agreed that this behaviour puts all Israelis in a bad light.
Maybe talking about this with a single person out of the group by himself may help. Ideally you find another Israeli person to do this talking, as sometimes any criticism of Jewish people may be interpreted as Anti-Semitism (which has nothing to do with it).