Mohammad seems to have been the L. Ron Hubbard of his day. Islam comes down to "My belief in God is better than yours." How trite and frightening.
A great turn of the phrase. Very true, sadly; and like L. Ron Hubbard, Mohammed capitalized on people who were socially at loose ends. Jews were dispersed and Christians were engaged in conflicts, particularly over the Arian heresy, which was especially important because many of the Visigothic and other barbarian tribes who overran the former Roman Empired subscribed to it and it had political implications.
Islam, however, was a religion of conquest from its very beginnings. One of the things responsible for its modern reputation for "tolerance" is the civilization of early Islamic Spain. However, this was the result of the fact that the original Islamic rulers were from the caliphate of Baghdad, a very sophisticated society. These Muslims themselves were later overrun by the much more savage and fundamentalist Berber Muslims, and any pretence of tolerance disappeared.
But I think that, in modern times, this myth is sustained by a desire to glorify all things non-Western, sometimes as the result of fuzzy-thinking romanticism, and sometimes for ideological reasons.