Abraham and Hagar had a child named Ishmael. This child became the father of Arabian tribes.
Although some modern Arabians can trace their lineage back to Ishmael, not all Arabs are descended from Ishmael. In the Arabian peninsula, there also dwells Abraham's other sons (by his second wife Keturah) and some of Esau's descendants.
Please see this article to understand the full picture:
https://www.gotquestions.org/descendants-of-Ishmael.html
We need to be careful to not paint all Arabs with the same brush. Not all Arabs are Muslims. Not all Muslims try to kill Jews and Christians. And not all Arabs are descendants of Ishmael.
Even though there are many Arabs who are descendants of Ishmael, not everyone hates Jews and Christians.
In any group of people, there are always those who follow God and those who choose to disobey God.
If we look at Jewish history itself, we see that a vast majority of Jewish people have been judged by God because of their idolatry and disobedience.
"Isaiah cries out concerning Israel,
'Though the number of the sons of Israel be like the sand of the sea, it is the remnant that will be saved; for the Lord will execute His word on the earth,
thoroughly and quickly.' And just as Isaiah foretold, 'Unless the Lord of Sabaoth had left to us a posterity, We would have become like Sodom, and would have resembled Gomorrah.'" (Romans 9:27-29)
So why did God bless Abraham, Isaac and Jacob, knowing that many Israelites would disobey Him and go after other gods? God blessed the Israelites because of their forefathers' faith and obedience. Similarly Hagar believed God and the angel of the Lord spoke to her twice (Genesis 16:10-12, Genesis 21:17-21). God blessed Hagar through her son Ishmael, because Hagar believed in God and did as God told her.
So we can see that God blesses people because of their faith and obedience. What happens to their children afterwards, depends on each individual. In an entire race of people, there will always be those who are faithful. It is for those people that God does not destroy everyone. It is for those people that God extends His blessings for generations.
Abraham asked God not to destroy Sodom and Gomorrah if there were a few righteous people in it.
The Lord said, "If I find in Sodom fifty righteous within the city, then I will spare the whole place on their account." (Genesis 18:26)
God also said, "I will not destroy it if I find forty-five there." (Genesis 18:28)
When Abraham continued to plead, God said, "I will not do it if I find thirty there." (Genesis 18:30)
God said, "I will not destroy it on account of the twenty." (Genesis 18:31)
And He finally said, "I will not destroy it on account of the ten." (Genesis 18:32)
In the end, God destroyed the place, because there was only Lot who was righteous. But God saved Lot from destruction.
As we can see from this encounter with Abraham, God would allow an entire population of bad people live if He finds only ten faithful people in the same vicinity.
Similarly, we see that among the Jewish people, there is a remnant of righteous ones. Among the Arabs, there are also those who seek God. So on their account, the Arabian nations still survive and enjoy residual blessings from the time of Hagar.
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Stepping back, we can see that the majority of people on earth choose the wrong path. Jesus stated, "Enter through the narrow gate; for the gate is wide and the way is broad that leads to destruction, and there are many who enter through it. For the gate is small and the way is narrow that leads to life, and there are few who find it." (Matthew 7:13-14)
We are Christians by God's grace who find the narrow gate. We are the few faithful on whose account God does not destroy everyone else until the end time. In this regard, the people of this world persecute the righteous and cause them a lot of harm (just as Islamic terrorists cause a lot of harm to the Jewish people). But if we continue to trust God and obey Him, we will receive an eternal blessing.
For God blesses those who love Him, and uses others (including their persecution) to train and perfect those who are His.
"Things which eye has not seen and ear has not heard,
And which have not entered the heart of man,
All that God has prepared for those who love Him." (1 Corinthians 2:9)
"'For Your sake we are being put to death all day long;
We were considered as sheep to be slaughtered.'
But in all these things we overwhelmingly conquer through Him who loved us. For I am convinced that neither death, nor life, nor angels, nor principalities, nor things present, nor things to come, nor powers, nor height, nor depth, nor any other created thing, will be able to separate us from the love of God, which is in Christ Jesus our Lord." (Romans 8:36-39)