[link|http://www.fact-index.com/m/mo/moloch.html|http://www.fact-inde.../m/mo/moloch.html]
[link|http://en.wikipedia.org/wiki/Moloch|http://en.wikipedia.org/wiki/Moloch]
...the most famous atrocity done in his name being the regular sacrifice of human babies. Although the original MLK deity may have sprung from a monotheistic culture (and even that's doubtful), he continued to appear well into the Babylonian period and beyond, each wave of conquest incorporating him into Yet Another Pantheon.
One might also easily mention the Aztecs' god of war, Huitzilopochtli, and the ritual human sacrifice and cannibalism performed in his name (among others in the same pantheon).
Before the advent of Christianity, world made do with non-religious ideologies for atrocities. Ellinistic culture and Roman Empire are two that we all know about.
I would put that more at the feet of a general atheistic trend which always accompanies large people-movements. Both the Greeks and Romans brought about and therefore experienced a large number of cultural upheavals. An increase in the pantheon followed each such shuffling, to the point of unsustainability which you mention. So I think you're right to say "there's a point at which polytheism loses its potency as a ideological basis for behavior." But I don't think you can then say _all_ polytheistic systems have been impotent. There's a critical mass which has only occurred (to my knowledge) a few times in history.