Firstly, giving 1.3B to prop up a corrupt undemocratic regime.
Secondly, doing it for decades.
Thirdly, doing it to a regime that also has at times actively encouraged hatred of the US.
Since you like quoting:
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Significant challenges remain to Egypt's full participation in the global economy. These include policy constraints, a work force growing faster than job creation, an educational system which is not providing all the skills needed by the economy, and low levels of investment in training.
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It's a drop in the ocean, the stuff that's needed isn't there. The Marshall plan was over 100billion in today's money (not far off what invading Iraq and creating another focus point for hatred cost), if you threw that at it you'd see real change. You're dealing with decades of indoctrinated hatred, that's not easy to dismantle, nor is it cheap but it's a lot cheaper than *not* spending that money. Extremeists of all shades, nazis to jahidis rely on angry, hurt, disinfranchised people for recruits, remove that pool, remove the problem. It really is that simple.
Bombing people may be a satisfying simplictic solution to placate hyperpatriotic americans but it takes real balls to suck it up and solve the problem instead.