Let's look at the situation in 1990:

(a) The PLO was a US-designated Foreign Terrorist Organization (FTO); and
(b) Talk of the establishment of a Palestinian state was considered beyond the pale for the U.S. and Israel, and in much of the international community. 

Now let's look at 1994:

(a)    The PLO was no longer a US- designated FTO (it was removed from the list in 1991), but through legislation like the PLO Commitments Compliance Act, Congress made clear that as far as it was concerned, it might as well still be on that list; and
(b)    Talk of the establishment of a Palestinian state was still considered beyond the pale for the U.S. and Israel, and in much of the international community.  Indeed, the idea of a Palestinian state is never mentioned anywhere in the Oslo Accords.

Now let's look at things in 2011:

(a)    The PLO has not been a U.S.-designated FTO for two decades and the leader of the PLO, President Mahmoud Abbas, has clearly and repeatedly rejected violence and terror and has worked closely with Israel on security; and
(b)    Since President George W. Bush's famous speech of April 2002, it has been U.S. policy and has become general consensus -- embraced at least rhetorically by Israel, by U.S. policymakers, by organizations across the Jewish political spectrum, and by the world -- that the goal of negotiations is the establishment of two states, Israel and Palestine, living side by side in peace and with security

What follows from this, given the ardent defense of the laws and the equally ardent demand for retribution against UNESCO and the Palestinians from some quarters, is that it doesn't matter to Congress that the original rationales for this legislation have evaporated. It doesn't matter, it seems, because new rationales can always be found. Like the utterly disingenuous argument that the Palestinians are trying to use the UN to bypass negotiations to get a state (never mind that the Palestinians have made clear that they remain committed to negotiating a two-state solution, or that the UN simply has no ability to deliver a state for them on the ground). Or like the feeble protestations to the effect that U.S. and Israeli objections to the Palestinians' efforts to gain international legitimacy for their aspirations of statehood reflect, in fact, nothing less than the deep and abiding U.S. and Israeli commitment to the achievement of a Palestinian state.
 
Clearly, the goal posts have been moved. 

And just as clearly, what is being signaled to the Palestinians is the following: if you fail to toe the "peace process" line dictated to you by Israel and the United States, you will be punished. No matter if what you do is non-violent and supportive of/consistent with a negotiated two-state solution. No matter if the line you are being asked to toe is both politically suicidal and guaranteed, at least for the foreseeable future, to deliver only humiliation, frustration, and more settlements. No matter if the situation on the ground in places like Jerusalem is truly reaching a tipping point where soon the two-state solution will be a lost dream.  No matter if nearly the entire world believes that you have every right and justification to take the action you are taking.

No matter any of that.  If you don't toe the line, an excuse will always be found to justify  punitive action against you. The goal posts will be moved again and again (indeed, some members of Congress have already indicated a desire to further strengthen the legislative anachronisms to be even more punitive). 

Faced with this reality, is it really any wonder that the Palestinian leadership has decided to continue pressing forward at the UN?