UNRWA was the best hope of survival for innocent people. Israel wants those people to die. So they look to take it away.
For people reading who may not know much about it and who have seen some of the accusations here...
There were concerns that a very small number of employees took part in Hamas activities and may have been members. These concerns led to investigations and termination of employment. There was no evidence of widespread involvement or affiliation. In any large organisation, there are going to be some people employed who do horrible things, despite organisation's efforts to prevent this - look at the police, NHS, etc. - it doesn't mean an entire organisation took part or supported something. Individuals employed in a number of roles by UNRWA had to pass vetting by Israel as well, so if there was a failure of security checking, this was not solely an issue with UNRWA.
Sinwar is reported to have been in possession of a UNRWA employee's ID card at the time of his death. The man to whom it belonged had managed to escape Gaza quite some time ago and has confirmed that he is living elsewhere in the world - he was not in Gaza. There is no evidence of how Sinwar came into possession of the ID card or even whether it was genuine.
There are many criticisms that can be raised against many organisations, and UNRWA is not perfect. What it was, though, was an essential route for delivering life-saving aid to innocent people in Gaza.
It isn't being banned because people in power suddenly care about organisational efficiency, vetting, finances, etc. It isn't being banned because of concerns about a small number of employees having been reported to have committed horrible acts. It's being banned because the people able to do so want Palestinians to die, and this helps achieve that.