Ray Jay wrote:1. The west's history of imperialism and false nation states.
2. Current western imperialism / world's thirst for oil.
3. Arab / Israeli conflict.
4. Sunni / Shia conflict.
5. Islam and it's tendency towards violence / terrorism.
6. U.S. and/or west's misunderstanding of region.
7. Something else.
1 & 2) In broad brush at least everything in these two rationales has been true elsewhere in the world without creating the same degree (or at least type) of instability, so this can't be the entire explanation. If you'd round out the "peculiar history" explanation by including mention of the Ottoman Empire, you'd be a step closer to capturing the full import of this category. Baghdad, Damascus, Mecca, Jerusalem, and most of North Africa spent about 400 years being something like a "colony" of Constantinople. There was a lot of taxation without representation and a more or less steady and continuous decrease in the percent of people working land they owned. A kind of feudalism persisted far longer in this region than in Europe, and tribalism/clannishness is still quite strong.
3) This has been relevant only since the 1920's. It's a symptom of one problem, the cause of others. It certainly hasn't helped bring the Arab world closer to the non-Arab world, but it might have or could have in an alternate universe. Most nations suffer when they experience a massive brain-drain. Imagine if the Arabs had welcomed the Jews as a massive brain-infusion.
4) No. Christianity experienced much more wrenching schism and sectarian violence, at (very) roughly the same time, and recovered from it much faster. Certainly not helpful, but not very explanatory.
5) See below.
6) We also misunderstand Asia, Africa, Latin America... France. You name it. Again: certainly not helpful, but not very explanatory.
Islam and Arab culture: these two, which are very much interrelated, explain a lot. Your question was about instability. Let's therefore first ask what, in the modern world, fosters stability. Here's a list of contributing factors:
1) Liberalism (meaning - as I use it here - the idea that the people, individually and collectively, are sovereign, not some institution, family, or regime.)
2) Progress/Modernism (meaning - as I use it here - a sort of international "keeping up with the Joneses"; the standard of living is comparable to that where it's highest and improves at about the same rate, with embracing of innovation crucially important.)
3) Globalism (meaning, as I use it here - a recognition that international relations and trade are more of a win-win situation than a zero-sum game.)
4) Individualism/Libertarianism (meaning - as I use it here - a sort of public philosophy and psychology that holds that humans as individuals are holders of worth, will, and rights, as opposed to clans, tribes or other institutions.)
5) Humanism (meaning - as I use it here - the widespread belief that helping your fellow man regardless of common identity of race, creed, tribe, etc. is one of the highest virtues.)
6) Feminism (meaning - as I use it here - the belief that gender doesn't affect human worth or potential.)
Now you can argue that stability is also fostered by other factors, but other than those based on brute force I think most can be traced back to these main elements. I'm thinking about things like an independent judiciary, vibrant press, good universal schooling, and so on. In any case these five elements, which are certainly interdependent and interrelated, and which in combination comprise the core of what I might call "Western Political Culture", are IMHO crucial to stability in today's world. A repressive society can seem to be more stable than a vibrantly free one, but when that's true it's always proven to be a temporary situation.
So back to Islam and Arab culture... they are almost the exact counterweights to all these elements. Submission to higher authority; low estimation of the value of individual lives; hostility toward outsiders; rejection or deep suspicion of innovation; female inferiority; and on and on. Some of it's Islam, some pre-dates Islam but still survives. Some can be related to life in a harsh physical environment; some is related to nomadic pastoralism. Some can be attributed to the peculiar circumstance of the Sa'ud-Wahhab alliance, which became culturally influential through control of the sacred cities and then doubly so with the advent of oil wealth.
I'm certainly not saying that Islam and Arab culture are the only problems in the region. There are many other factors. Not mentioned above is the way an oil-production economy does so little for the average fellahin while making the sheiks wealthy beyond imagining; it's perverse and distorting in the extreme. What I'm saying is this: if you're trying to figure out what policy to pursue in the region a failure to grasp the significance of what I've described will be a fatal handicap. Get familiar with all the rest - with everything - but recognize that the easiest element to overlook, because it can be impolitic to focus upon, is Islam and Arab culture.