Geek, I agree with some of what you are saying... but for me the Old Covenant God made with Israel, tells a story.
Israel was not chosen because they were better then any other nation, but because of Abraham being faithful to God and trusting in God. Abraham lived in the land of Ur. God called "Abram" out of that land...which he didn’t argue about, but went.
As people created more and more idols/gods for themselves and got further and further away from the one God (God is Spirit and not made out of clay) God chose Abraham to reconcile mankind.
The bible starts with telling the story of Adam and Eve (mankind) who had rejected God ect...now you can say this is all made up for the reason of some nation to have power over another nation and you have got a good point, for religion certainly seems to be used that way, but was it that way with Abraham....? Did "Abraham" have an agenda ? (You could ask...Is Abraham real...?)
People certainly departed quickly from worshipping the one God, for the history of Israel is full of it.
For example....
"And The Lord said to Moses, "Make a fiery serpent, and set it on a pole; and every one who is bitten, when he sees it, shall live." So Moses made a bronze serpent, and set it on a pole; and if a serpent bit any man, he would look at the bronze serpent and live." (Numbers 21:4-9 RSV)
Centuries Later, The Bronze Serpent Was Destroyed Because The Israelites Had Turned It Into An Idol
"In the third year of Hoshea son of Elah, king of Israel, Hezekiah the son of Ahaz, king of Judah , began to reign. He was twenty-five years old when he began to reign, and he reigned twenty-nine years in Jerusalem. His mother's name was Abi the daughter of Zechariah."
"And he did what was right in the eyes of The Lord, according to all that David his father had done. He removed the high places, and broke the pillars, and cut down the Asherah. And he broke in pieces the bronze serpent that Moses had made, for until those days the people of Israel had burned incense to it; it was called Nehushtan."
"He trusted in The Lord the God of Israel; so that there was none like him among all the kings of Judah after him, nor among those who were before him. For he held fast to The Lord; he did not depart from following Him, but kept the Commandments which The Lord commanded Moses." (2 Kings 18:1-6 RSV)
BTW I got the flood article from that site...looks like a good one.
http://www.keyway.ca/htm2003/20030818.htm