According to the story of the flood why do the gods decide to destroy humanity? How do the gods react to the when they see the effects of the flood?

There is no explanation given for this decision in the Epic of Gilgamesh. However, the flood story in Gilgamesh is based on that contained in the Epic of Atrahasis. The reason given there is that human overpopulation has resulted in too much noise so that the gods cannot rest.

It is important to note that this decision is criticized strongly by the gods themselves in the Epic of Gilgamesh. It is described as a hasty and excessive punishment and the chief god himself (Enlil) is reprimanded for his decision. Ishtar and the creator goddess Nintu/Belit-ili lament the huge loss of life and Utnapishtim is rewarded with immortality precisely because he has saved himanity from extinction.