I'm surprised that a Christian hasn't answered this yet, but God in the Old Testament picked Abraham to build a chosen nation to relay his message to the rest of the world. The Jews were to prepare the way for the coming of the Savior through the sacrificial system. This failed and demonstrated once for all that human effort is insufficient to follow God.

The way the Jews are is because they were given this task, failed, and rejected God. In other words, their negative attributes are a consequence of the mission given to them, not inherent traits from the beginning. Likely any other person picked besides Abraham would've resulted in the same or worse.

Many people hold that the Jewish religion was originally polytheistic because the Old Testament refers to other gods. However, on reading the actual texts it becomes clear that the Bible refers to "other gods" in the sense that we refer to the Greek gods - in other words, imaginary concepts. See for instance, Isaiah 44:

All who fashion idols are nothing, and the things they delight in do not profit. Their witnesses neither see nor know, that they may be put to shame. Who fashions a god or casts an idol that is profitable for nothing? Behold, all his companions shall be put to shame, and the craftsmen are only human. Let them all assemble, let them stand forth. They shall be terrified; they shall be put to shame together.

The ironsmith takes a cutting tool and works it over the coals. He fashions it with hammers and works it with his strong arm. He becomes hungry, and his strength fails; he drinks no water and is faint. The carpenter stretches a line; he marks it out with a pencil. He shapes it with planes and marks it with a compass. He shapes it into the figure of a man, with the beauty of a man, to dwell in a house. He cuts down cedars, or he chooses a cypress tree or an oak and lets it grow strong among the trees of the forest. He plants a cedar and the rain nourishes it. Then it becomes fuel for a man. He takes a part of it and warms himself; he kindles a fire and bakes bread. Also he makes a god and worships it; he makes it an idol and falls down before it. Half of it he burns in the fire. Over the half he eats meat; he roasts it and is satisfied. Also he warms himself and says, “Aha, I am warm, I have seen the fire!” And the rest of it he makes into a god, his idol, and falls down to it and worships it. He prays to it and says, “Deliver me, for you are my god!”

They know not, nor do they discern, for he has shut their eyes, so that they cannot see, and their hearts, so that they cannot understand. No one considers, nor is there knowledge or discernment to say, “Half of it I burned in the fire; I also baked bread on its coals; I roasted meat and have eaten. And shall I make the rest of it an abomination? Shall I fall down before a block of wood?” He feeds on ashes; a deluded heart has led him astray, and he cannot deliver himself or say, “Is there not a lie in my right hand?”