It was basically a huge excuse for losing the war based on shame. There is never a definitive reason for something so complex, yet Hitler and the Nazis placed almost all the blame on this one concept. It was clearly an exaggeration. A classical case of creating a scapegoat.
The stab-in-the-back myth was the notion, widely believed in right-wing circles in Germany after 1918, that the German Army did not lose World War I on the battlefield but was instead betrayed by the civilians on the home front, especially the republicans who overthrew the monarchy in the German Revolution of 1918–19. Advocates denounced the German government leaders who signed the Armistice on November 11, 1918, as the "November Criminals" (German: Novemberverbrecher).
When the Nazis came to power in 1933, they made the legend an integral part of their official history of the 1920s, portraying the Weimar Republic as the work of the "November criminals" who used the stab in the back to seize power while betraying the nation. The Nazi propaganda depicted Weimar as "a morass of corruption, degeneracy, national humiliation, ruthless persecution of the honest 'national opposition'—fourteen years of rule by Jews, Marxists, and 'cultural Bolsheviks', who had at last been swept away by the National Socialist movement under Adolf Hitler and the victory of the 'national revolution' of 1933"
...In 1919, Deutschvölkischer Schutz und Trutzbund leader Alfred Roth, writing under the pseudonym Otto Arnim, published the book The Jew in the Army which he said was based on evidence gathered during his participation on the Judenzählung, a military census which had in fact shown that German Jews had served in the front lines proportionately to their numbers. Roth's work claimed that most Jews involved in the war were only taking part as profiteers and spies, while he also blamed Jewish officers for fostering a defeatist mentality which impacted negatively on their soldiers. As such, the book offered one of the earliest published versions of the stab-in-the-back legend.
https://en.wikipedia.org/wiki/Stab-in-the-back_myth
Not saying there is absolutely no truth in this, certainly some Jews benefited from WW1 as some people in business always benefit from tragedies. But imo it was greatly exaggerated.