Many are familiar with Maimonides' explanation of sacrifices in the Guide to the Perplexed (3:32), where he maintains that the inclusion of sacrifices in the Torah was a concession to the people, who had a desire to imitate the pagan norms of worship at the time. This is only partially correct.
First off, while yes, the Israelites certainly would have wanted to follow local norms of worship, the Torah's prescribing of sacrifice does not reflect any language of "concession" but rather wholehearted agreement with the institution of sacrifice. Secondly, even if the author(s) of the Torah knew full well that sacrifice was not intrinsically necessary, meaning that God did not need to be fed and cared for in this way, it would still be important to maintain sacrifice, not just as a concession, but as a matter of national dignity. How could it be that other nations would show so much care and devotion to their gods, spreading out the best of the land in daily meals and incense before them, whereas we Israelites do not care enough for our God to offer even so much as a crumb. It does not look good for the nation, or for our God.
This as well answers the question about the Torah's inclusion of the "Akeida," the binding of Isaac. To be sure, we would all like to explain like the 14th Century commentator Ibn Caspi that Abraham's test was not to sacrifice Isaac. But not only does he stand fairly alone among the classical commentators in offering such an interpretation, really the Torah itself seems to clearly indicate otherwise. Abraham passed the test precisely because of his willingness to sacrifice Isaac, his beloved son and heir. The question of course is how could God have commanded such a sacrifice when the Torah later goes on to warn the people against following the idolatrous practices of other nations: "Do not do this to the Lord your God, because every abomination of the Lord that He hates they did to their gods; for even their sons and daughters they will burn in fire for their gods." (Deut. 12:31)
Clearly the Torah is against child sacrifice, and the fact that the angel stopped Abraham attests to this. However, the Torah also recognized the need to have Abraham effectively sacrifice his son. Why? Because this was the way, par excellence, for a person in the ancient world to demonstrate their unequivocal devotion to their God. And if mere laypeople of other nations were willing to make the ultimate sacrifice, to give their most prized possession, their own flesh and blood, how is it that Abraham, the "father of many peoples," the leader and progenitor of the Israelites, could not also give on this level? If he had not, it may have looked as if he lacked adequate credentials for leadership, to be God's ever-willing agent and selfless servant. It would have been beneath our national dignity, beneath God's dignity, to appear "lesser" than the nations in this regard.
Moving forward in time, prayer eventually eclipsed sacrifice as the Jewish mode of worship. Indeed, part of this owed to the destruction of the Second Temple. However, the institution of prayer had already been established well before the destruction. Clearly, just as the original Israelites wished to worship in the manner of the nations by offering sacrifices, so too did later generations desire to utilize prayer, which presumably became a mode of worship in common use by other nations, such as the Greeks. When the Temple was destroyed, prayer by default became the only mode of worship allowed. But in all probability, once sacrifice was all but rooted out of "civilized" religion and was looked upon as a vestige of paganism, of primitive religion, the notion that sacrifice could no longer be performed would have come as a welcome relief to most Jews. That is to say, prayer was now the proper mode of worship. And just as with sacrifices, it would have been below the dignity of the Jewish religion not to honor its God with prayer.
This transition was most certainly connected with the increasing appeal of Christianity. With the advent of a "New Testament" which resonated with the higher moral sensibilities of people at the time, it became beneath the dignity of a
religion to have a "wrathful" God. In earlier times such a God was magnificent, powerful,
respected, an honor for a people to have. No longer. But rather than add to God's word, the Jewish methodology was to reinterpret it, mold it into something acceptable. Midrash in essence saved us from the ignominy of a wrathful God. In the Biblical view, an affront to God's honor was worthy of wholesale slaughter, innocents and children alike. As much as it may be difficult for us to comprehend, this was not considered to be morally problematic at the time. In Talmudic times however, and in the Midrash, such cruel or unjustifiably harsh punishment on the part of God would be totally unacceptable. So the Midrash adds detail to the story, justifications and qualifications, to soften the blow as it were, so as to bring God in line with a more dignified conception. Likewise, the Torah extends the death penalty rather liberally according to the text. In rabbinic interpretation however, capital punishment in the Torah serves largely as a warning, which only very rarely and under the most extreme
circumstances would actually be carried out.
Fast forward once again to the post-Enlightenment, post-Scientific Revolution, modern era. Whereas religion once served as the beacon of light to the world, offered answers which could be fully digested by the intellectual mind, science and secular scholarship now began to command far greater attention and respect. At the early stages, it would have been beneath the dignity of most anyone to call themselves an "atheist" per se. However, the theological dogma became softened among many intellectuals, who were attracted to more to "deistic" ideas (a more naturalistic conception of God) rather than traditional theism, with its belief in Divine oversight and judgment, Heaven and Hell, miracles, and so forth. It would be beneath the dignity of an enlightened thinker to entertain fundamentalist beliefs. However, it would also be unseemly to profess in public the denial of a God/Creator altogether.
Nowadays, throughout the non-fundamentalist world, it is perfectly acceptable to call oneself an agnostic or an atheist. However, there is still a certain level stigma attached to non-belief, as evidenced by politicians who commonly pander to religious groups by professing their belief in God and Jesus Christ. Evangelical or otherwise fundamentalist Christians certainly do not see it as "beneath the dignity" of Jews to take the Bible literally. Yet in more secular circles, which includes the vast majority of academic and scholarship circles, Torah and Orthodoxy are grouped with all other forms of religious fundamentalism, being at best quaint, naive and sorely deluded, and at worst a danger to free society. Torah Jews are seen as blind followers of religious doctrine, denying basic facts about the origin and age of the Universe and the development of life on Earth. They are seen as teaching their children to believe in myth and superstition, holding fast to antiquated notions about women and gays, and to varying degrees as rejecting the value of secular knowledge and studies. And they would be correct in this.
It is contrary to the honor and dignity of Torah, and of Jewish civilization, for such beliefs and attitudes (and in some cases, practices) to be perpetuated. It should be beneath the dignity of any people who seeks truth, who eschews the worship of falseness, to carry on professing myth to be reality, and reality be the product of a "secular agenda". It will eventually be beneath our dignity to walk into synagogue with the intent of worshiping a God. All this is a "Chilul HaShem", a blight on the name of Torah and Judaism.
That, in brief, is another example of what is "wrong" with God.