Although I believe Robert Graves' basic theory is right, I think he’s reached his conclusion by a rather fanciful and complex route. However, there is simpler theory that promulgates the idea that Jesus was a direct descendent (through Joseph) of the House of David (the true royal bloodline). If that is correct, then he was, indeed, the rightful king of the Jews, and as such, a threat not only to Herod, a king elected by the Romans, but to the Romans themselves. If we assume the New Testament, the only record we have, contains something of the history of the area and the times (which I do) this makes perfect sense. It would account for the Slaughter of the Innocents, and for the flight into Egypt. It would also explain the charge the Romans levelled against Jesus, and the sign they pinned to the cross. Many believe that Jesus was executed for blasphemy, but since the Romans worshipped multiple gods, they did not acknowledge blasphemy as a crime, and crucified Jesus on a charge of insurrection. In other words, they saw him as a trouble-maker. If Jesus was indeed the rightful heir to the throne, then that information had the potential of causing even more unrest in an already volatile area, and consequently major political difficulties for the Romans, so perhaps this is why there are no official records of the trial or the crucifixion - and no official documentation confirming that Jesus ever lived.
Of course, the story has since been manipulated in a direct attempt to demonise the Jews - and it worked. Spin is nothing new! (Incidentally, I don't believe Jesus died on the cross - I think he was rescued).