"I know that the standard Mahayana claim about the Theravada canon is that he needed to teach it for those who were not ready to accept the Mahayana. "
This is a skillful means explanation to a very long issues spanning centuries.
First of all you need to be aware of the Abhidhamma:
The Abhidhamma Pitaka is a detailed scholastic reworking of material
appearing in the Suttas, according to schematic classifications.
The narrative:
Tradition[4] holds that the Buddha thought out the Abhidhamma
immediately after his enlightenment then taught it to the gods some
years later.
The facts
Scholars, however, generally date the Abhidhamma works to originating
some time around the third century BCE, 100 to 200 years after the
death of the Buddha. Therefore, the seven Abhidhamma works are
generally claimed by scholars not to represent the words of the Buddha
himself, but those of disciples and scholars
The debate
As the last major division of the canon, the Abhidhamma Pitaka has had
a checkered history. It was not accepted as canonical by the
Mahasanghika school[dubious – discuss][2][10] and several other
schools[dubious – discuss].[11] Another school included most of the
Khuddaka Nikaya within the Abhidhamma Pitaka.[2] Also, the Pali
version of the Abhidhamma is a strictly Theravada collection, and has
little in common with the Abhidhamma works recognized by other
Buddhist schools.[12] The various Abhidhamma philosophies of the
various early schools have no agreement on doctrine
The Early Mahayana sutras
Several scholars have suggested that the Prajñāpāramitā sūtras, which
are among the earliest Mahāyāna sūtras,[17][18] developed among the
Mahāsāṃghika along the Kṛṣṇa River in the Āndhra region of southern
India.[19]
The earliest Mahāyāna sūtras to include the very first versions of the
Prajñāpāramitā genre, along with texts concerning Akṣobhya Buddha,
which were probably written down in the 1st century BCE in the south
of India.[20][21] Guang Xing states, "Several scholars have suggested
that the Prajñāpāramitā probably developed among the Mahāsāṃghikas in
southern India, in the Āndhra country, on the Kṛṣṇa River."[19] A.K.
Warder believes that "the Mahāyāna originated in the south of India
and almost certainly in the Āndhra country."[22]
Prajñāpāramitā
Prajñāpāramitā is a central concept in Mahāyāna Buddhism and is
generally associated with the doctrine of emptiness (Shunyata) or
'lack of Svabhava' (essence) and the works of Nagarjuna. Its practice
and understanding are taken to be indispensable elements of the
Bodhisattva path.
So why is all this important to the question?
It is because the Mahayana started out to counter the ontological claims presented in the Abhidhamma of various early Buddhist schools. You first need to understand the fundamental of the teachings before you can point out the issues within the teachings.
Many people including scholars and practitioners find Prajñāpāramitā sutras to be incomprehensible, even labeling it crazy wisdom.
However it is ultimately the application of dependent origination even to the attainments themselves. This verse by Nagarjuna in the Mulamadhyamaka Karika is the key to unlocking this understanding.
All dharmas that arise from causes and conditions,
I call them emptiness.
They are also provisional names,
And also the Middle Way.
The Chinese text
眾因緣生法，我説即是空；
亦為是假名，亦是中道義。
What Nagarjuna is saying, is that because all dependent originated phenomenon are due to causes and conditions, by their very conditionality they are impermanent and without self. As stated by the Buddha.
Pratītyasamutpāda
"When this is, that is;
This arising, that arises;
When this is not, that is not;
This ceasing, that ceases."
Therefore because things are impermanent and without a true lasting self. He call them 'empty'.
However the term 'emptiness' is also just a convenient label, because it does not fully explain the complexity of the phenomenon and all the causes that made up something. To say something is 'empty' is that it ultimately lacks an underlying 'essence', but does not mean that it does not exist but that it does not truly exist.
This is therefore the Middle Way between Eternalism and Annihilationism. To be annihilationist is to say nothing exists and that there are no causes for anything to occur. This isn't the definition of emptiness as used by Nagarjuna. It is because there are causes, there are outcomes, but because they are made up of causes, there are also impermanent, hence is not Eternal.
So whenever you come across a text like the following:
Form is Emptiness, Emptiness is form.
Heart Sutra
Your should consider the meaning of emptiness.
Form is dependently generated, Dependent origination is form.
Form is impermanent, Impermanence is form.
Form is without self, Without self is form.
So the question would be, why did Mahayana Buddhist Nagarjuna rephrase what is already a known Buddhist concept into 'emptiness'.
It because of what they perceived as the reification of Buddhist teachings in the Abhidhamma by schools, recall that even in modern Theravada teaches that Nibbanna is unconditioned, a deathless dimension, and that the Arahants are perfect etc.
Nagarjuna denies such permanence and eternalism.
This is why it is stated:
There is No Wisdom, and There is No Attainment Whatsoever.
Because wisdom is itself conditioned (by the practice of the Noble Eightfold Path), and therefore wisdom too is impermanent. Hence the fruit of Four Stages of Attainment (Stream Entry, Once Returner, One Returner, Arahantship are too impermanent).
It is not saying that there wisdom does not exist or the fruits of the contemplative life does not exist. They do exist, but like everything else are impermanent and not self.
Nagarjuna is breaking our attachments to the attainments within the very Dharma itself! Even Nirvana itself is impermanent! The end of suffering as is suffering is caused and conditioned and is impermanent! This is the meaning of non-duality in Mahayana Buddhism. It is not that wisdom and ignorance is the same. It is because they are both ultimately impermanent and cannot be permanently separated.
As you can see you first need to know what is there, such as the attainment of wisdom, the ending of suffering before you can come back and let go of even the attachments to those things. A person with no experience in Buddhism hearing 'emptiness' will either recoil with horror or become dangerously nihilistic increasing his own delusion. Even in the early Buddhist canon stated that the Buddha taught the results and rewards of good actions to lay people, encouraging them to be generous, and assuring them that they will reap the fruits of their actions. To more advance practitioners he cultivates their concentration and wisdom, finally pointing out that things are impermanent and not self. You need to know the basic goal of becoming enlightened before you realize there is never an end to the practice.
No person has ever saved all sentient beings or emptied the hells,
including any Buddhas. It would be expected a Buddha would teach what
is possible & achievable. A person that has not completed their Path
cannot be a Buddha.
As pointed out, no person can ever be 'perfectly' enlightened either. The Mahayana Buddhists know their goal is not truly possible just as even the goals of the Theravada - extinction of rebirth is not truly possible.
If some or all Buddhas teach an enlightenment without Arhants, who in
turn teach an enlightenment without Arhants, how this is any different
to Arhantship, just under a different name?
In truth the names Bodhisattvas, Arhats, Buddhas are merely labels. But the distinction is the connotations that each term refers to. Arahant implies an end state to the practice. Bodhisattvas indicates that there are actually no end state, hence you can have an unenlightened bodhisattva as most beings are, or a Great Bodhisattva with immense practice. A 'Buddha' implies 'perfection' even as there is no real perfection.
