I agree. Prager has a point, but it's only part of the equation. But the question was what is Prager's take on the issue.
Ethnic conflicts are a good deal more complicated than that. The bottom line is that people, Jews included (or perhaps especially) are ethnocentric. Diaspora people are resented because its natural and normal for ethnocentric people to resent unassimilated "nations within a nation" who live among them but whose first loyalty is to one another rather than their own countrymen. It's a completely normal and natural reaction, and the situation would be reversed if there were a Jewish majority and a Christian minority.
There's also the fact that alienated diaspora people tend to gravitate towards radical politics.