8. The premise of this argument is wrong. One can easily conceive a plausible scenario as to how this myth was born and perpetuated into Jewish folklore, just as ALL myths are incorporated into all people's folklore. We need not assume that every parent told the identical story to their children, and thus, if it did not happen, it would have immediately raised a question. Instead, we can imagine a scattered, illiterate people, who formed collective, oral myths, some of which were eventually written down. At some point in history (possibly under Ezra) those myths and laws were codified into one book. This book was passed on, and as the population learned how to read, more and more people told the story that they've read in the book. At some point reading the book became a requirement during the Sabbath services, and thus all participants in the prayers would have heard those stories, and passed them on. Nothing suggests that merely because something is written, and then told on, it must be true.
This does not answer the tradition that everyone was there and heard it which is common to all jews in all disparate locations in the world.