Talk of when monotheism "started" is vague. You could say that monotheism started with blatant polytheism since polytheistic systems have henotheistic tendencies. For instance, Zeus was the chief god of the Greek pantheon. Jewish monotheism was more firmly established, though, closer to the middle of the first millennium BCE, during the Babylonia, Persian, and Hellenistic periods.

I agree that the alienation was to some extent one-sided, in that pagans were often curious about Judaism and even attracted to it, as opposed to being all Nazi-like rulers. Even the conquerors sometimes didn't dismiss Judaism outright. Nevertheless, Jews felt alienated from pagan cultures, in that they defined themselves in opposition to them, rather than taking a more liberal, cosmopolitan attitude towards societal relations. The ancient Jews were proto-existential in that respect. They were obsessed with their cultural authenticity or "purity."

So no, I don't think this was just intellectual or academic for Jews. It was existential and therapeutic. At least, that's my hypothesis.