The structural devestation has certainly been significantly less than many other devestations I could name which are happening contemperaneously.
However, I can't speak for the psychological (and other forms) of devestation that may be happening in Ashdod and Sderot. I would like to know more about that.
The constant trickle of rockets creates a very poor incentive for any economic development, leaving an already troubled region in a spiraling economic downturn and brain drain for those who are able to leave. Other effects will surely be realized as time goes by, the constant disruption of the education system in the entire region comes to mind.
Are we speaking about the Israeli or the Palestinian side of the border? On one side economic development maybe suppressed, but across the border people struggle for the basic necessities of life. As everyone knows, there is no easy solution to this except for both parties to redress their mistakes. As long as there is oppression and no justice, both will be the losers.
Assuming this is in fact, Gaza city, if there is indeed a market for iPhone 4s and they have high end refrigerators stores, I think this is a wealth distribution problem. Clearly there is high poverty in Gaza (60% according to one article I read), but also there is a substantial middle class.
However, I can't speak for the psychological (and other forms) of devestation that may be happening in Ashdod and Sderot. I would like to know more about that.