And does that view still hold sway today?
I'll do my best to both address the question directly simply as it is and also address the question in a historical context with considerations to German history.
In short, Germany felt at the end of World War I that they had not lost the war on the battlefield, but rather had lost the war at home. The revolutions of 1918-1919 in particular drew the ire of many Germans, including Hitler. More than any other single event, Germans used the revolutions of 1918-1919 as evidence of losing the war on the "home front".
The revolutions of 1918-1919 began with unrest in the German Navy. After nearly four years of war, the German military position in World War I had become quite desperate in 1918. While Germany itself had not (and would not) been invaded and occupied, there was little chance for an absolute German victory in the war. By September of 1918, Kaiser Wilhelm II had been advised by many of his supporters to seek out a cease fire with Great Britain and France. While the decision to seek a cease fire was being considered by the German High Command, an order for Germany to engage the British Royal Navy in a climactic battle was initiated by Admiral Franz von Hipper. The general sentiment among sailors at the time was that the war was nearing an end, and most German sailors were not willing to engage in a major naval conflict with what was considered to be the preeminent naval power in Europe at the time. The order of 24 October 1918 culminated in the Wilhemshaven and Kiel mutinies, which eventually led to a widespread revolution throughout Germany.
The Supreme Command of Germany had failed to capitalize on an offer from American President Woodrow Wilson to negotiate peace terms in early 1918 that would have been negotiated without the definitions of "victors and conquered." At the time, Germany felt itself to be in a very advantageous position due to the conclusion of conflicts on the eastern front. After a promising start to its "Spring Offensive", Germany lost momentum on the battlefield and was subjected to constant defeat during the allied "100 Days Offensive" that lasted from August to November 1918. General Erich Ludendorff, the leader of the German war efforts in late 1918, advised Wilhelm II to accept Wilson's conditions for a ceasefire. By ending the war before the inevitable physical invasion and occupation of Germany, Ludendorff was attempting to shift blame from the military to the political disturbances that were evident in the Reichstag (German legislative body). This marks the beginning of the infamous "stab in the back" legend/myth. Wilson issued a series of notes that outlined his new conditions for a cease fire; German retreat from all occupied territories outside its own borders, the cessation of submarine warfare, and the abdication of the throne by Wilhelm II in favor of a democratic government. Ludendorff rejected the terms of the cease fire and was removed from his position as Quartermaster General of the German Army. By this time, the general public of Germany had finally learned of the desperate military situation on the western front. The Supreme Command of Germany continued to be stubborn to the idea of Wilhelm's abdication despite the growing public sentiment that it was necessary for peace with the allied forces. With enemy troops threatening the German border and deep political unrest, Germany exploded into a state of revolution in November 1918. Wilhelm II was forced to abdicate the throne, and a provisional German government which would become known as the Weimar Republic would accept the harsh terms set forth by the allies in the Armistice of Compiegne. The same government would later sign the Treaty of Versailles, perhaps the most controversial war treaty in history.
It is important to note that the origins of the "stab in the back" myth are not necessarily anti-Semitic. The political right that perpetuated the idea that Germany had lost the war at home originally was blaming the rise of liberal and radical politics (communism, socialism) for the failures of the war. Anti-Semitism took a central focus in this delusional notion in a number of ways.
The notion that "November Criminals" (those with loyalties extending beyond Germany, i.e. Jews, Catholics, communists, socialists, etc) had sold out Germany to its enemies became popular rhetoric among hardline conservatives and nationalists. The failure of the Spring Offensive was blamed on Jews who had instigated strikes in manufacturing plants that produced weapons and other wartime materials.
The SPD (Social Democratic Party) was the favored party of most German-born Jews. The SPD/USPD assumed a central role in government during the years of the Weimar Republic.
For his part, Hitler manipulated the "stab in the back" myth in a number of ways. In "Mein Kampf", Hitler asserts that the Jews were primarily responsible for the rise of Bolshevism in Germany. He also blamed the Jewish press for turning its back on Germany at the midpoint of the war. Hitler and Ludendorff both shared the view that the homefront had lost the war, not the military, but Hitler took it one step further by asserting that it was the Jews who were responsible for the Armistice of Compiegne and the Treaty of Versailles. The man who signed the Armistice of Compiegne, Matthias Erzberger, was a Catholic. Hitler firmly believed that Jews were responsible for the Dawes and Young financial plans that directed German reparations in accordance with the Treaty of Versailles. Interestingly, JP Morgan was involved in both plans and was in fact Jewish.
The notion that Jews were responsible for the failures of World War I has largely been discredited by modern historians. Fritz Fischer, perhaps the most acclaimed German historian in modern times, asserts that the failures of World War I can be traced to the decisions of Wilhelm II and the desires of Germany to assert itself as the superpower in Europe. It is also important to note that Germany's allies during the war were weak partners who most assuredly would have been defeated in a matter of months without German support. Additionally, the traditional values of German militarism are as much to blame as anything else. Since unification in 1870-1871 under the guidance of Otto Von Bismarck, Germany has maintained a strong identity with regards to militarism and race. I'll address the broader context of German history and its relationship with the aftermath of World War I and the rise of widespread anti-Semitism in a different post, but the traditions of militarism were very much a part of the German decision to participate in the First World War.
Sources: Adolf Hitler, "Mein Kampf" Chris Harman, "The Lost Revolution: Germany 1918-1923" Friedrich Junger, "Anti-democratic Thought in the Weimar Republic" Fritz Fischer, "War of Illusions", "Germany's Aims in the First World War"
Effectively, the German extreme right, the DNVP and (later) the NSDAP, after the DNVP began to fragment in the late 1920s, refused to accept the idea that Germany had ever been defeated on the battlefield. Regardless of how foolish that idea actually was, the German right took to blaming three separate groups:
Combine that with the fact that many of the more visible faces on the extreme right were WWI heroes (e.g. Erich Ludendorff) and the Dolschlusslegende began to gain credence. I would also imagine that the extreme right was very good at mobilizing existing anti-Semitism (though Germany was less anti-Semitic than most W. European countries) and it makes quite a bit of sense.
The real book to read about the development of Nazism is Fritzsche's Germans into Nazis, which is a middle ground between Fischer et al's. Sonderweg and the idea that Nazism was just a total aberration in German history.