This is perhaps the one question in my readings of the reign of Queen Isabella that I've been unable to reconcile. True, Spain had a history of pogroms and violence towards Jews, but it seems to me that by the 1480s and 1490s, most of that had been water under the bridge. It is my understanding that the main problem the monarchs had in terms of religious differences weren't the Jews themselves, but rather the conversos that were of Jewish blood (this group, after all, was the primary subject of the Spanish Inquisition). By the 1490s, Jews also rose to be prominent members of society, gave financial aid to the Granada War and Colombus' Voyage, and some even became close friends with the queen.
So why, if Jews had a relatively ok position in Spain, particularly compared to the rest of Europe, did the Catholic monarchs kick out the Jews?
The best answer I've been able to find is from Kristen Downey's Isabella: Warrior Queen, a book where the writer also struggles in reconciling the relative tolerance Isabella had towards the Jews and the expulsion. She says that the expulsion came about as a clause in the Treaty of Granada, but even she admits that this answer isn't exactly great. After all, why not allow the Jews to come back in after the Catholic Monarchs reneged on the treaty and abolished many of the more tolerant aspects of the treaty towards Muslims?
Moreover, it just seems to me like a silly idea. Aside from the obvious financial detriment (which the Monarchs could have no idea would be recompensed by Colombus' voyage), I feel like it would have militarily been a bad move, since many allies of the state, who had state secrets, now fled to Spanish enemies like Portugal and the Ottoman Empire (Isabella harbored fears of an invasion from the Turks her whole life).
I'm writing an epic novel series on the reign of Queen Isabella, and the expulsion of the Jews is definitely a subject that needs to be addressed. So, why did she do it?
This thread, and your previous one, compartmentalize the consideration of how the Spanish Inquisition started and how it became the institution that it did, into a purely religious standpoint. This is not a good approach, and as you have discovered such compartmentalization reduces the context of that time and place into a one-dimensional argument that naturally has detractors and apologists.
The formal reason for the founding of the Spanish Inquisition was reports from friars that (1) the new converts were not genuine in their Christian belief and even worse (2) some of the remaining Muslims and Jews who did not convert, attempt to convert the new Christians back to their old religion. Clearly, these were not acceptable.
Isabella and Ferdinand then took the old Inquisition that had existed in Aragonese lands and in Sicily (then under Aragon) due to several heretical movements in the past, and added a clearly Reconquesta flavor to it. Then, they implemented it in Castille.
The fear of Ottomans I will not comment in absolute terms, but her worries are nothing compared to that which confronted Charles V, and even more strongly Philip II, who saw the Siege of Malta and the Battle of Lepanto. You need to consider each escalation, if it's an acceptable term, in its proper context.
Its worth pointing out that Spain was one of the last countries to expel the jews, the British and the French had done so years earlier.