Edit: fixed grammar error.
I think it is much more complicated than user4012 suggests. It actually goes back in part to what Trump said during his campaign. Two things he was saying were 1) That he thought the Gulf countries should have to pay the US to keep the bases there https://www.nytimes.com/2016/04/28/us/politics/transcript-trump-foreign-policy.html (Airforce base in Qatar, Naval base in Bahrain, etc...) at the same time that he was talking about how he thought NATO countries should have to pay more. I thought in an interview afterwards he named the smaller countries, but I'm having trouble finding that one. Petty extortionist that Trump is asking for "protection money." Maybe he wanted it more directly to his own pockets than http://www.reuters.com/article/us-qatar-usa-investment-idUSKBN1421AF and is possibly bitter about failed deals: http://www.independent.co.uk/news/world/middle-east/donald-trump-qatar-sponsor-terrorism-business-deals-fail-us-president-gulf-emirate-saudi-arabia-uae-a7788151.html The other thing he claimed is that he would bring a peace deal to the Israel/Palestinian conflict. So how will he achieve those? http://www.newsweek.com/trump-peace-deal-israelis-and-palestinians-not-difficult-people-have-thought-594294 http://edition.cnn.com/2017/05/22/middleeast/donald-trump-israel-visit/index.html An Israeli paper (Haaretz) recently reported that they were closer to a peace deal than ever before, which would seem quite strange with Trump around since he's certainly not being diplomatic with the Palestinians, so what's going on that makes them say this? Trump knows that Israel will only accept extremely favorable terms in such a deal, so he plans to squeeze the Palestinians in Gaza, in essence to reestablish the Palestinian Authority's former dominance over Gaza's affairs instead of Hamas. http://edition.cnn.com/2017/05/22/middleeast/donald-trump-israel-visit/index.html http://webcache.googleusercontent.com/search?q=cache:_Fo5s04AU0IJ:www.haaretz.com/israel-news/.premium-1.795376+&cd=2&hl=en&ct=clnk
How will he get the other Arab countries on board? He will offer them his support in squeezing Qatar to clamp down on pretty much the only free press in the region (Al Jazeera) that has been a thorn in the side of regimes that regularly abuse human rights. http://edition.cnn.com/2017/06/13/middleeast/qatar-crisis-hamas/index.html He also wants to cut off the Muslim Brotherhood in this for Egypt, they were democratically elected in Egypt following the revolt there during the Arab Spring. The Egyptian military under Sisi staged a coup and he took power following that. So now Sisi is looking to crush any support for the Muslim Brotherhood. Saudi and the UAE are also very against the Muslim Brotherhood because the Muslim Brotherhood doesn't believe in monarchies. These two also want to dictate Qatari foreign policy in regards to other countries like Iran and Turkey.
In regards to the comment by asmgx, KSA does still have relations, but they want Qatar to mirror the exact same policy (like Bahrain does). Yes, the Saudi people support Hamas, but the Saudi government has flipped the other way to get Trump's support to control Qatar (and are hypocritically pretending they never sent money towards Hamas, and far worse groups). This ultimately isn't about terrorism in the eyes of anyone involved, except maybe Trump.... This is about regional politics and power. Saudi, the UAE, and Egypt are all afraid of their own people in essence. That is why they rejected the Arab Spring so vehemently. They had the same spat at that time and withdrew their ambassadors for several months, but they didn't have US support that time around so things were far less drastic.
You can see how afraid of their own people they are in the way that they are handling this current situation. They have closed down the only none state run news organizations in their countries, including Al Jazeera offices. They are blocking Al Jazeera satellite broadcasts from their people. The UAE and Bahrain have introduced penalties for any of their people showing even any sympathy for Qatar in social media posts. The UAE's policy includes up to 15 years in prison. Bahrain has not specified what the potential penalties are to my knowledge, but I expect they are quite severe. Saudi, Bahrain, and the UAE have recalled all their citizens from Qatar and kicked all Qataris out of their countries. In the process breaking apart thousands of married couples and separating parents from their children, as well as preventing many children from completing their school years right at exam time.
Does money move from Qatar to terrorist groups, to some degree, possibly, but efforts have and continue to be made against that. Take Qatar Charity for instance. There were in the past allegations that they were a conduit for such. Since that time, Qatar has created a portion of the government that regulates charities and accounts for all of their income and spending. The UN quite strongly rejected the inclusion of Qatar Charity in the list of terror groups that these countries say are in Qatar. The most probable reason they are listed there is because they supply a lot of food and medicine for the people of Gaza, which is exactly what Trump wants to cut off to get his "peace" deal.
I think that they thought that Qatar would capitulate quickly under such a large amount of pressure applied so quickly. I don't think they realized how wiling Turkey would be help to Qatar. Now I expect there will be a long stalemate because the other Arab states won't back down in fear of losing face and bolstered by Trump's support, but the demands they have made seem too high for Qatar to give in to. Just around a week previously Qatar had agreed with these other nations to step up more in rooting out funding for terrorism. Statements from the State Department and Department of Defense officials even have praised the efforts of Qatar and called for reconciliation. Mainly I think most of them want to make their stance on alleged funding clear, but they want the major sanctions lifted, but then there is Trump and his cronies.... The real bones of contention where Qatar feels it cannot back down are the dictates on their foreign and domestic policy, cutting off/chilling relations with Turkey and Iran as well as closing or controlling Al Jazeera to censor coverage of the surrounding countries, especially Saudi and Egypt. The problem is that if they give into those demands then they will be crushed firmly under Saudi's boot for the foreseeable future. At the same I don't think there will be any invasion because Qatar is very strategic for the US. Not only in their location and that the Al Udeid base is there. But also because of their non-financial ties with the Muslim Brotherhood and Hamas, it is likely actually encouraged by the US because it gives them a place to meet and negotiate with them (despite all the hard line rhetoric the US spouts about not doing so). Qatar and the US have a ten year mutual defense agreement from 2013-2014 that I think also should be in effect in such a case... but Trump is a loose cannon....
Back to the "cause" the Arab countries initially acted as though it was because of comments supposedly made by the Qatari Emir at a graduation event of those serving in the national service. These false claims were sent out via the hacked national news site QNA (now confirmed by the FBI) and were repeatedly played by media in their countries even after being rejected as false. Also, I was personally at the event and the Emir gave no speech at all. The event was also broadcast so this should be easy to verify. These state run news organizations in the other countries then ran a doctored version of the footage with the news ticker at the bottom making claims about what he said while he gives no speech in the footage. At this point they have given up on using this as the cause and fallen back on the terrorism rhetoric because it resonates with Trump and the right wing groups in the West. They dug up the alleged ransom deal well after it supposedly occurred and well after cutting off relations, they are clearly not the reason. Also... what kind of victim blaming is that even if true, some of your people were kidnapped so you paid a ransom?
I know this isn't very worthy as an SE post, since I'm not tracking down the many news references... but hey, you guys know how to use Google.