The whole circularity of this structure actually bring Atlantis and it's rings to mind, and also we must remember that the Sahara had a much different climate not that long ago.
I did hear a fairly credible theory that it is just an allegory invented by Plato, but influenced by various other myths and political centers (such as king Minos rule on Crete).
Another quite compelling theory posits the destruction of Thera also caused the Biblical ten plagues of Egypt.