On two occasions I have seen something similar in the USA. First was in the airport at Atlanta where a early teen girl was having difficulties dealing with the noise and stress of airplane travel. The two women she was with were having an equally hard time dealing with her and were trying to persuade her that the reason she was behaving badly was because The Devil was making her do it. The second occasion was again with an early teen boy but this time at the top of Hart's Pass on the Pacific Crest Trail in the north Cascades. The kid clearly did not want to be there and again the women in charge were dealing with the situation by accusing him of being possessed.
In both cases the kids were stressed out enough to be on the verge of hysteria and the protestations of the adults were only making it worse. It seemed pretty obvious to me at the time that the solution was simply to get everyone to calm down. Doubly so, since becoming a parent I discovered that stress and anxiety are extremely contagious.
So the appeal of demons, for me, is simply a coping mechanism by parents to deal with children they cannot cope with or understand, albeit a a pretty drastic one.
Later, one of my first boyfriends said something similar-- except I was now the demon. At one point he said I was "the demon at the center of the universe, which spawned all other demons". Of course this all occurred when we were fighting.
Anyways, my point is that I think you're correct. It's a last-resort coping mechanism. Very harmful. I'm still trying to figure out whether or not I'm actually human or some kind of universal mistake.
Anyone who's been through the one of the US public education systems can presumably concur with that assumption.
Consider the frequent use of various vitamins and supplements with mixed or outright negative research backing them for some conditions.
(I am not attempting to start a debate over whether various supplements are beneficial for some or all people with various health problems, merely observing that it's a contentious area of research while a great many people take one side as correct.)
I was quite surprised to find out when I was at MIT that a surprisingly high percentage of graduate students studying cosmology / astrophysics were fundamentalist christians.
Given my naive upbringing (I'd never previously met any devout people) I was surprised to meet any religious people at MIT at all; inexplicably I was somehow smart enough not to investigate as I am sure I would have come off as impolite and obnoxious in the process, which would be unfair and mean.
(I am sure I have plenty of firmly held irrational beliefs too but of course I can't identify most of them)
What a horrible way to treat a kid BTW. Sounds like the poor OP's father might have had some other, perhaps biological, issues. I'm glad OP survived!
And he's not wrong.