They also supply some hand picked quotes from scholarly works in support of this idea. The answer is as follows:
First, it is just not possible to establish an irrefutable Islamic belief based on what the kaafir Pharao says. The fact the Pharao believed that the god Moses spoke of is placed in the Sky does not necessitate that Moses has said this to him, because whatever Pharao says about the “God of Moses” could be something Pharao falsely assumed or misinterpreted.
Second, quotes from books about what other than a Prophet said also does not prove a belief to be true. You need a highly authentic ĥadiith or a Quranic statement (other than quotes of what a kaafir says,) and you need to establish their meaning in a way that does not contradict other narrated texts, or any irrefutably established fact. See this article.
Third, the Sky is below the ˆArsħ and inside the collection of creation. To believe that Allaah is in the Sky is contrary to the “placed above the throne” belief, and pure ĥuluul (believing that Allaah is inside creation.) If they say “in the Sky” means “above the Sky,” then they have interpreted it with other than the linguistically apparent meaning, and chosen an interpretation that contradicts with “He does not resemble anything,” and the Prophet’s saying: “O Aļļaah, You are the First, so there is nothing before You, and You are the Last so there is nothing after You. You are Al-Thaahir so there is nothing above You. And You are Al-Baatin, so there is nothing below you. (Muslim)” See this aricle.
Finally, and most importantly, place is an aspect of particles, or bodies of them. If Allaah was in a place He would be something with size, a particle or a body, and all particles and bodies need a creator, as they need specification. Denying this contradicts the main premise for the proof of the Creator’s existence. See this article with links.