I'm not sure on my stance on whether the Lusitania was sunk purposely, but I do believe it is a valid argument. I wrote a paper on this subject, using that the British were responsible as my thesis, but I don't have access to all my research, so I'm using mostly memory and Lusitania.net for this...
-The Lusitania, Mauretania, and
Olympic were all requisitioned for military service. Mauretania and Olympic were retained for military service, but Lusitania was given back to Cunard because it consumed too much coal, a bit of a ridiculous notion, as Mauretania would have consumed just as much. However, before Lusitania was returned, part of her third class cabin was removed, enlarging her cargo hold, and the Admiralty gave her back to Cunard with "a very important job to do." What this job is, however, we do not know.
-Her speed is reduced, to save money, to 21 knots max/18 knots cruising.
-As she embarks on her final crossing to England, she is carrying highly explosive artillery shells. She has carried munitions before, but not any artillery shells. These were housed in her forward compartment, near where she was torpedoed; whether these had any effect on the second explosion is irrelevant; the fact that they were placed there is merely an interesting choice.
-All British ships were given an escort ship upon entering the English Channel, since the English Channel was a known haven for U-boats. Lusitania's escort never showed up, and she was told via radio to proceed anyway, but instead to head to Queenstown, Ireland, as there are no U-boats nearby. At this time, however, there is Schwieger right outside Queenstown Harbor sitting on the surface, ready to sink a ship that would come to Queenstown. The Lusitania, with reduced speed, comes directly in his path.
While the Zimmermann Telegram did initiate the war officially, we must look at other events to show the Lusitania's importance.
-Before the Lusitania, there was a pro-German sentiment present; pro-German galas were held on the intercepted Vaterland in New York. Also, our isolationist attitude, as Brian stated, was still present.
-The Zimmermann Telegram resulted in the US formally declaring war on Germany. However, had the Lusitania never occured, the US would never have been drawn to the conflict at all; we would have continued our complete neutrality. It was only after the Lusitania that our anti-German sentiment began to grow; the Zimmermann Telegram was sent to Mexico because the Germans were afraid we would eventually enter the war on behalf of the Triple Entente.
-Don't forget that if the Lusitania was indeed too expensive for the Admiralty to use ever during the course of the war, she would have been an ideal target; a high profile ship which frequently carried rich Americans, which was of no help to the Admiralty as, say, the Olympic was.
Also, I disagree with the unimportance of America's help. Don't forget that, at this time, the US and Britain were equally industrialized, which would have been an important qualification; even at this time, unindustrialized Russia had one gun for every four men, and was already getting pummeled by Germany. Even though Britain was considered the world's superpower, the US would have been a much stronger ally than either France or Russia.
As for Churchill not even considering was already using Q-ships, which is putting private ships (though not ones with passengers onboard) in the line of fire, so it was in his mentality, whether or not he did it, to use it as a target.
In short, there is substantial evidence that supports the Lusitania's purposeful sinking, but it is equally possible that Lusitania was just part of an unfortunate chain of events.
But does anyone believe that Churchill might have turned a blind eye with the Lusitania, in the hope that if she were sunk then it help get America into the war ? Any solid substance to this or is it just another myth... I often hear that the Lusitania might have been sacrificed.