dd: No more sad than an American citizen renouncing his citizenship. (In fact for hashkafic reasons, with renouncing Israeli citizenship it may even be a happy occasion.)
jewish girl: If you are an Israeli citizen, you’re children are also citizens automatically – even if they were born abroad. (Even if they always lived abroad and never even visited Israel.) Whether than entails Army obligations I’m not certain, but from what I recall hearing is that in fact it does. (Although it may or may not be possible to officially get an Army exemption for having always been living abroad.) This is probably the most practical reason why a citizen would renounce their Israeli citizenship. (Their may be others as well.)