The answer is simple. The words, "I exalted you above all the peoples" does not refer to Israelites being exalted above everyone else for all times to come in the future. It only meant they were exalted above everyone else in their own respective time. The proof for this is in verse 3:33 "Allah did choose Adam and Noah and the family of Abraham and the family of 'Imran above all peoples." Thus, the meaning of the Israelites being preferred over everyone else only refers to their own age.
Thank you.
Which age (in terms of B.C.E and C.E) are you referring to?
Jim