In India, people trust gurus and babas even for problems like pollution, water conservation, economy and healthcare. I have seen software engineers, working in top tier US product companies, who believe India had planes, nuclears 1000s of years back.
"Too good to be true"? You're joking, right?
There's loads of people in the world with a high enough status, but who still are gullible enough because they never really had any deep relationships. Be it friends, lovers or family.
That's exactly the kind of weaknesses upon which people build religions.
About from a quirky sexual liberalism, the teachings were standard fare for a religion. The phenomenon was also unremarkable, the the grand scheme of things. The world is full of holy men, holy places, masters and devotees. It always has been. Any religion with a an origin story features a story like this. The old Hebrew/jehovist religion centred around prophet-leaders. Moses was a holy man, along with the other prophets. Jesus was such a holy man. Mohammed. Budha. Zoroaster, probably. The founders of most old catholic orders... You might even include communist "holy men" or other secular/political movements in that overall group.
Basically, we can just take it as a given that holy men with an extremely devoted group of devotees will emerge here and there.
At that point it's up to a St. Peter, or a Ma Anand Sheila to do something with it.
Just before wild wild country begins, America experienced the Jonestown bloodbath. Its definitely a history that repeats.