In addition to what brother Abdul Jabbar has said, I would like to add some points I think is the cause of intolerance.
Quran is very clear that belief is a thing of heart and it is not to be forced on anyone. For example Quran says let there be no compulsion in religion (2:256) and don't force people on to Islam (10:99) etc. There are lot of similar verses in Quran that preaches tolerance. But the sad thing is some Muslims consider these verses as abrogated by what they call verse of sword that is 9:5. Actually 9:5 is a verse revealed during war and is not a command to kill all polytheists. This is clear from 9:6 where it is said if some polytheist seek refuge they should be taken to place of safety. If all polytheist should be killed why take them to a place of safety ?
So by considering lot of verses that commands tolerance as abrogated by citing an unrelated verse, these people say forcing people to Islam is allowed. You can see a question and answer in popular site IslamQA that states this http://islamqa.info/en/34770 . In this fatwa which is a question regarding 2:256, answers by quoting 9:5 and says "These and similar verses abrogate the verses which say that there is no compulsion to become Muslim. "
ISIS in iraq follow these type of interpretation that is why when they captured Sinjar, they gave only convert or leave option to Yazidi community there.
When Quran says even prophet(s.a) cannot make people he love accept Islam, these people say we can make people accept Islam by using force
Indeed, [O Muhammad], you do not guide whom you like, but Allah guides
whom He wills. 28:56
Another problem in considering 2:256 which says "Let there be no compulsion in religion" as abrogated is, in the same verse it is saying "The right path has become clear from the wrong.". If the first part is abrogated then they would have to admit second part is also abrogated, which we know is not true.
You may be asking why non tolerant version is popular and tolerant version is minority. Non tolerant version will have upper hand because they will be using force to conquer lands and spreading their ideas and tolerant people would not go for war unless it is for self defense or for some genuine reason. This may explain why historically non tolerant version gets more popularity.