Pakistan should accept Israel if the Saudis are able to get the Palestinians' major demands met. If that happens and KSA goes for it, Pakistan should do as well. In all honestly, there is nothing of net benefit for Pakistan either way.
Engaging with Israel early on could have reaped some benefits like Azerbaijan having strategic ties but that was not palatable given the horrendous situation for Palestinians. This could have resulted in military, agriculture technology benefiting Pakistan. Water over the bridge.
Not recognizing Israel and being a hold out after Saudis recognize will have very diminishing returns for Pakistan. Our country is not very important in the overall scheme of things for the region, Middle East and the world. I think the only reason Israel would have Pakistan in its calculus is our nuclear weapons program and perhaps one more check-mark on another Islamic nation recognizing Israel. The other way around, Pakistan has no interests in Israel. I don't see Pakistan-Israel becoming huge trading partners given we cannot even get it going with long term partners that are much nearer to us than Israel.
So despite our own self-importance in the minds of some, nobody cares about Pakistan-Isreal relations.
From an economic point of view, recognizing Israel could have been our ticket to access other markets; whether we like it or not, it has a sizable influence within the U.S. power structure. But I agree that the agri-tech it offers could have allowed our local industry to grow leaps and bounds; even major U.S. companies are collaborating with Israel, like ConAgra Brands.