Just to clarify. The S-300 is not giving the Israelis nigntmares, i would say that it is causing a irritaion in their plans. Though the S-300 is a very potent system the limited deployment in Iran will only mean that the Israelis will suffer some losses. Which they dont want to, so they are lobbying with Russia not to sell these systems to Iran. Surprisingly they have been rather successful in stalling the delivery of these systems till date.
Isreal remains very capable of hitting Iranian nuclear sites. The presence of the S-300 many fold increases the probability of a few Israeli losses. Thats certainly no nightmare for Isreal, but it is for Iran.