Allaah The Exalted Says (what means):
• {Indeed, the religion in the sight of Allaah is Islam.} [Quran 3: 19]
• {And whoever desires other than Islam as religion - never will it be accepted from him.} [Quran 3: 85]
According to the meaning of these two verses, Islam is the religion that is most favored by Allaah The Exalted. So why did Allaah create Christianity and Judaism? Also, why did He begin the call to worship Him Alone by sending Ibraaheem (Abraham), may Allaah exalt his mention, when He could have sent Muhammad, sallallaahu ‘alayhi wa sallam, directly?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu 'alyhi wa sallam, is His slave and Messenger.

Regarding your question about why Allaah The Exalted created both Christianity and Judaism, it seems that you are referring to these two religions after they were distorted and altered, because  the general meaning of Islam is to worship Allaah in the manner that His Messengers, may Allaah exalt their mention, have explained.

Applying this meaning, Islam refers to the messages of Nooh (Noah), Moosa (Moses) and ‘Eesa (Jesus), as well as Ibraaheem, may Allaah exalt their mention. There are many verses in the Quran which indicate that all the previous messages testified to and confirmed Islam. For example, Allaah The Exalted Says (what means): {Or were you witnesses when death approached Ya‘qoob (Jacob), when he said to his sons, "What will you worship after me?" They said, "We will worship your God and the God of your fathers, Ibraaheem and Ismaa‘eel (Ishmael) and Is’haaq (Isaac) - one God. And we are Muslims [in submission] to Him."} [Quran 2:133]

Based on this verse, it becomes clear that Judaism and Christianity were Islam before they were distorted and altered.  Allaah The Exalted praises the disciples of ‘Eesa in the verse in which He Says (what means): {And [remember] when I inspired to the disciples, "Believe in Me and in My messenger ‘Eesa." They said, "We have believed, so bear witness that indeed we are Muslims [in submission to Allaah]."} [Quran 5: 111]

On the other hand, the specific meaning of Islam refers to the Message of Muhammad, sallallaahu ‘alayhi wa sallam.  The followers of Muhammad, sallallaahu ‘alayhi wa sallam, are Muslims, while those who refuse to follow him are considered  non-Muslims, because they do not surrender to the command of Allaah The Exalted, and instead choose to surrender to their whims and desires. Pursuant to this, Jews were Muslims during the era of Moosa and Christians were Muslims during the era of ‘Eesa . However with the mission of the Prophet, sallallaahu ‘alayhi wa sallam, the Jews and Christians who refused to follow him were not considered Muslims, because they did not obey the command of Allaah.

In light of these facts, your question could be rephrased to: why did Allaah The Exalted decree that many Jews and Christians should deviate from the religion of Islam? The answer is as follows:

It  has been eternally established, according to the will of Allaah and His fate, that mankind would not be a single nation. Referring to this He Says (what means): {And if your Lord had willed, He could have made mankind one community; but they will not cease to differ.} [Quran 11: 118]. Moreover, the will of Allaah The Exalted works according to His wisdom that He may reveal to some of His creatures or may keep hidden in the Unseen. His answer to the question of the angels, in the following verse, is an example of this. Allaah The Almighty Says (what means): {They said, "Will You place upon it one who causes corruption therein and sheds blood, while we declare Your praise and sanctify You?" Allaah said, "Indeed, I know that which you do not know."} [Quran 2: 30]

Here are some aspects of the wisdom of Allaah The Exalted behind creating multiple disbelieving groups and sects:

1-      Fulfilling His promise to fill Hell with the non-observant from among His slaves. In this regard, He Says (what means): {But the word of your Lord is to be fulfilled that, "I will surely fill Hell with Jinn and men all together."} [Quran 11: 118]

2-      Testing people in this world and establishing the norm of the ongoing struggle between good and evil. In this regard Allaah The Almighty Says (what means): {And if Allaah had willed, He could have taken vengeance upon them [Himself], but [He ordered armed struggle] to test some of you by means of others. And those who are killed in the cause of Allaah - never will He waste their deeds.} [Quran 47: 4]

3-      Establishing the obligations of Jihaad and enjoining good and forbidding evil. Had not there been disbelief and disobedience, there would not have been a cause for Jihaad or Da‘wah (Islamic propagation).

As for your question why He started the call to worship Him alone by sending Ibraaheem it is invalid because the call to worship Allaah alone and to testify to His monotheism started with the beginning of human deviation after the descent of Aadam (Adam) . Before the mission of Ibraaheem Allaah The Exalted sent messengers to warn people, bear glad tidings and call the deviated to obey Allaah. Ever since humans deviated from sound conduct, there were callers and messengers in every place, calling people to the true religion of Allaah. From among the prophets who were sent by Allaah The Exalted to His slaves before the advent of Ibraaheem were Nooh (Noah), Idrees (Enoch), Saalih (Shelah) and many others, may Allaah exalt their mention. In this regard Allaah The Almighty Says (what means): {And [We sent] messengers about whom We have related [their stories] to you before and messengers about whom We have not related to you. And Allaah spoke to Moosa with [direct] speech.} [Quran 4: 164]

Part of the wisdom behind the fact that Muhammad, sallallaahu ‘alayhi wa sallam, is the seal of all prophets is that he was sent to all humans and Jinn. Before him, each messenger was sent by Allaah The Exalted only to his own people. Therefore, it was necessary that the messenger who was sent to all humans was the final one, not the first. Likewise, the Sharee'ah, with which he was sent, is the most perfect and nullifies all the previous legislation of the other prophets. Therefore, it was necessary that this Sharee'ah, whose book - the Quran - judges all previous heavenly books and which Allaah The Exalted made superior above all others, be the final one, and not the first.

Allaah Knows best.