Traditional Christianity, like Judaism, maintains some idea of "the gods of the nations" (i.e., the gods of those peoples who did not worship YHWH, like Baal, Horus, Amun, Ashur, etc.), but with the understanding that these are idols or worse (Psalm 96; 1 Corinthians 10:20). Does that mean that they do or do not exist? I think a case could be made for either, but at least in my own tradition they are sometimes treated as though they do, and perhaps for the Egyptians -- having previously been worshipers of these other gods (you can even tell this in the Coptic names of some of our saints and priests like Sarabamoun, which is a combination of the gods Serapis and Amun) -- this makes more sense than the attitude of others that says that there can only ever be one being that people call god. Even the shema, the statement of ancient Israel's monotheism, says
adonai eloheinu, adonai echad -- the Lord is our God, the Lord is one. It doesn't say anything about
other people's gods (that's elsewhere, as in the Psalms), only about the Israelites' God.
Following this kind of attitude, we in the Coptic Orthodox Church have prayers like this one, which is the sixteenth part of the midnight praises (tasbeha) for Sundays:
Who is likened unto You, O Lord among the gods, You are the true God, the Performer of miracles.
+ You revealed Your power, to the people, and You saved Your people, with Your arm.
You descended into Hades, and brought up, those who were captives, in that place.
+ And granted us again, the freedom, as a good God, for You have risen and saved us.
+++
You will hopefully notice that it says "O Lord among the gods, you are the true God". So the gods of the nations exist in some sense, but they aren't the true God.
Yes, 'we' were doing the whole "no god but God" thing long before Muhammad and co. ever existed, and obviously we both got it from the Jews in some sense (just as the Jews were themselves influenced by others, like the Zoroastrians).
So I don't really see how this is inconsistent. You let the nations have their gods (in the sense that they'll continue to have them anyway, since that's the nature of localized/national gods), but only recognize the One God that you worship.
If you want to say that this means "Thor exists", then fine, but that's
you saying that, and it doesn't do anything to shake our belief in the one God -- Father, Son, and Holy Spirit. +
Basically, it's more about recognition than actual physical or spiritual existence. You can worship an old can of Coca-Cola if you want to, but I'm not going to recognize that as God just because you do, even if you gather an entire tribe or millions of people who also worship your Coca-Cola can. (I'm thinking here of the phenomenon of "
cargo cults" where just that sort of thing happened, in a way; it just never spread beyond isolated tribes, for obvious reasons.)