Just wanted to wrap up with a few closing thoughts...
In one of his comments, James argued that the first Christians did not believe Jesus was divine. This is an issue which I must confess I know very little about. I mean, I don't know of anything in Paul's letters or in Mark (the first gospel) which treat Jesus as completely human. In fact, 1 Corinthians 15:27 says that everything is under Christ except God. So it seems that Jesus was viewed as very important and very Godly, but was also treated as distinct from God (and as a lesser being). It seems to me that Jesus would have been viewed similarly to the other sons of God being worshipped in that, who are often called "demigods". I can't be certain of that, it is just my personal opinion.
I think James was also much clearer about the criterion of embarrassment: He is arguing that, given the expectations which were present for the messiah (that he was to be an earthly ruler), it doesn't seem like anyone would make up a character who was the precise opposite of expectation. The Jews wanted an earthly king who would lead them to conquest of other nations. But Jesus is only a peasant, the son of a carpenter. Why would someone invent him? To be clear, the Jesus myth theory would entail that Jesus was originally understood as allegorical, but over time this understanding of Jesus was lost and Christians began to suppose Jesus was an earhtly, flesh and blood person. To understand how this can happen, see my second endnote**.
I think I can confidently say that if the Jesus myth theory ever degenerated into claiming that there was a conspiracy to invent an earthly person I would abandon all thought of it. It would not make any sense to believe that the earliest Christians tried to invent someone who was thought of as a regular, earthly person. The Jesus myth theory which I believe has the most credibility would be the one which states that the first gospels were symbolic tales and that Jesus was originally viewed as more of a spiritual figure. Perhaps not necessarily a God, but most certainly higher than man (see 1 Corinthians 15:27).
The writer of the gospel of Mark could have chosen to present Jesus as a literal earthly king, but outsiders would have immediately known that the story was fictional. You could not have a written a story of Jewish king leading te Jews to victory without people knowing that it was fiction. I think that initiates into early Christianity were supposed to believe that the story was true, and gradually they would be told what it really symbolized*. I think that Mark was faced with a conundrum of having to let his audience know that Jesus was king without giving the game away that this an allegorical tale. His solution was to have the charge against him written as "King of the Jews" (Mark 15:26). So this is my conjecture about how this would work under the mythicist theory. I'm not saying it is right, I am simply explaining how I think it would work under the theory.
* Here is what Sallustius wrote:
"We may well inquire, then, why the ancients forsook these doctrines and made use of myths. There is this first benefit from myths, that we have to search and do not have our minds idle.That the myths are divine can be seen from those who have used them. Myths have been used by inspired poets, by the best of philosophers, by those who established the mysteries, and by the Gods themselves in oracles. But why the myths are divine it is the duty of philosophy to inquire. Since all existing things rejoice in that which is like them and reject that which is unlike, the stories about the Gods ought to be like the Gods, so that they may both be worthy of the divine essence and make the Gods well disposed to those who speak of them: which could only be done by means of myths.
Now the myths represent the Gods themselves and the goodness of the Gods - subject always to the distinction of the speakable and the unspeakable, the revealed and the unrevealed, that which is clear and that which is hidden: since, just as the Gods have made the goods of sense common to all, but those of intellect only to the wise, so the myths state the existence of Gods to all, but who and what they are only to those who can understand.They also represent the activities of the Gods. For one may call the world a myth, in which bodies and things are visible, but souls and minds hidden. Besides, to wish to teach the whole truth about the Gods to all produces contempt in the foolish, because they cannot understand, and lack of zeal in the good, whereas to conceal the truth by myths prevents the contempt of the foolish, and compels the good to practice philosophy."
** On how a mythical Jesus evolved into a historical one.
Here is Bob Price's description of how Hercules originated as a solar deity but later evolved into a flesh and blood character. Note that I am not claiming Jesus began as a solar deity, I simply want to draw attention to the fact that symbolic myths can later be mistaken for historic truths.
"I find it more natural to suppose, with many myth scholars (among whom I do not number myself, I hasten to add) that raw myths treated stellar entities as direct characters in symbolic myths, but that in subsequent retellings and reinterpretations, the sun, moon, and stars are transformed into anthropomorphic gods and heroes. Hercules must first have been the sun, period. But then people tend to forget that and to imagine that there was a demigod hero names Hercules. One can still sniff out his solar origins from clear vestiges of it, like the lion's mane he wore (the sun's rays), the twelve labors he performed (the zodiac), and the deadly arrows he shot (sunstroke). But you do have to make the connection, because it is no longer overt. Later, a la Euhemerus, people begin thinking of these figures as real historical individuals whose memorable greatness led to their mythic exaggeration. This seems like a realistic reading of the history of mythology to me. So I doubt that any hierarchy in the Church (or Buddhism, etc.) has realized for a long time the origin of their faith and its symbols."