"Isn't it incongruous with belief in one universal almighty all-encompassing divinity to contend that favoritism from such is extended to a particular group?"
I don't think so. Unless you reject a good deal of Jewish Biblical history. And demand that an all-encompassing God reside solely within human logic.
As for Christianity, I don't see "having a lesser status" as being an issue. Christ granted a relationship with God to all peoples, and in that sense, the terms "greater" and "lesser" really have no meaning to me as a Christian, only that one has a relationship. In a sense, Christianity is the understanding that the idea of chosen people now encompasses all people of humanity, not just the descendents of Abraham, as it goes. Further, as a Christian, I am freed from the strictures of the law--a freedom a Jewish person does not have.
My pastor tonight noted that Christ did not come to destroy the law (OT), but to fulfill it!