The fact is, the people of Babel were thriving under their Pagan Demonic Gods because, from the very beginning, Demons have always been interested in advancing the human race. Just as Thoth/Hermes brought the occult arts and sciences of Alchemy, Astrology, and Magick to Egypt, which then spread out to Greece, Rome, and elsewhere. The people of Babel introduced the concepts of Economics, Masonry, Geometry, and other forms of knowledge critical for a civilized society to grow. During this period, there was much peace, joy, and ambition amongst the people. As a result, they had undergone the development of a massive tower tall enough to reach the heavens.
We can safely assume this was merely an expression. The people understood heaven's location as entirely outside of the physical realm of existence. Still, the tower continued to grow to remarkable heights, heights so great they would still be considered unfathomable by today's standards, and Elohim eventually noticed. Elohim and his legion of Angels, who lack free will and strictly exist to do their God's bidding, have always worked to suppress human development.
Naturally, he was very unhappy with the people's success and what they had already accomplished and considered it a threat.
In Genesis 11:6, Elohim spoke of the Pagan civilization of Babel, saying, "Behold, they are one people, and they have all one language, and this is only the beginning of what they will do. And nothing that they propose to do will now be impossible for them."
To stifle their growth of power, he began breaking apart their unity. This was first done by confounding their speech so that they could no longer understand one another. This immediately broke the bond of solidarity the people shared. Eventually, Babel's people broke apart and dispersed in different directions to establish new civilizations throughout the world. Once a promising society aimed to reach the heavens, it was later reduced to a scattered bunch of tribes forever ignorant of what they could have once achieved.