Also if you look at many pagan myths magic is very low key...almost on par with what we call Low Fantasy. In stories where the gods themselves are the main characters it is almost like someone threw a switch and turned their supernatural abilities off.
The Search of Isis for the Body of Osiris, Cupid and Psyche,
Thor Visits the Giants, and several others are in this vein.
In fact it can be argued that in the earliest part of the OT the Christian God doesn't come off as all knowing or all powerful ie as limited as his pagan counterparts. It is only with Jesus that the all the stop so to speak seem to be pulled out.
A. Well, you undoubtedly know better than I do that polytheists weren't really competing with each other for whose god is more true than the others' god. Even when the domains overlapped, they would rather assimilate, say, Thoth with Hermes, than argue whether Thoth is real and Hermes is fake or viceversa. Or further back in time, they'd rather assimilate Inanna with Ishtar than have an argument about it.
I would propose that that's half of the explanation why such a miracle arms race was not necessary for polytheists. They simply never had to out-miracle another deity.
Monotheism was basically what happened when one group stopped being nice about it. And if flows naturally into doing the schoolboy "my dad is stronger than your dad" argument instead. And sure enough that requires one to invent all sorts of stuff for why and in what way your dad is better than everyone else's.
B. The second half of it, IMHO, is the MCI (Minimally Counter-Intuitive) factor. Stories are more remembered if they're almost natural, but contain a minimal amount (usually just one) "counter-intuitive" element. Counter-intuitive meaning basically "unnatural" or "going against all that you know about that thing" in that context.
Basically, consider that I were to tell you the following stories:
1. A perfectly intuitive (i.e., natural) one would be for example, about seeing a normal cow grazing and mooing
2. An intuitive but bizarre story would be, for example, about a cow someone painted blue and wrote Milka on the side. It has nothing supernatural, you have no problem imagining how it happened, but it's not quite your average normal story either.
3. An MCI story would be, for example, about a cow that talks, like in Aesop's fables
4. A maximally counter-intuitive story is one which is seriously heavy on the unnatural stuff, for example, about a super-powered cow that talks, flies, teleports, can turn invisible, and shoots laser beams out its udders.
In studies repeatedly after 1 hour, the perfectly intuitive one is the most remembered. After a week, number 3, the MCI is the most remembered. The maximally counter-intuitive story gets distorted into something more manageable.
On the other hand, at any interval, the most believed is #1, followed by #2, then #3, and #4 generally is the least believed by far.
In fact, there is a conjecture and computational model to support it, that basically storing and filing X as an Y with the extra non-trivial property Z, may well be how the brain processes and files information. In fact, that it may well be the best way to do it.
Well, I would humbly submit that over-the-top monotheism tends to produce stories that cross into maximally counter-intuitive domain. And show all signs of distortion that come with that domain. E.g., while a god that is just one of omnipotent, omniscient and omnipresent would be MCI, when you have all 3, you get distortions. E.g., people start to effectively imagine that god being in just one place at a time, or can do one thing at a time (even if very fast.) Think of all those rationalizations where God couldn't save a kid here because he had to save someone else over there. That's what I'm talking about. You end up with the story having to be broken up and distorted into MCI not just because of philosophical theodicy considerations, but basically as a fundamental problem of the human brain.
Basically if you don't have the necessity for your god to be more over-the-top than all other gods combined, and there is no enforcing a particular version of the story, the polytheists' stories naturally get to be MCI stories. That's the kind of stories that out-compete both mundane and maximally counter-intuitive ones. A story where Zeus (or Ra, or Odin, or whoever) is just a guy, plus one unnatural twist, are naturally more remembered AND more believed than stories where he has a dozen unnatural twists.
So, yes, the polytheists' stuff will not be half as over-the-top.
It's only when you go monotheist and HAVE to have a God that out-gods all others, that basically you have to go maximally counter-intuitive... and end up having to deal with the resulting proliferation of distortions.