The idea that "Inuit" have a single language is evidently the first issue, but the idea behind the myth seemingly came from an 1800s anthropological study that mentioned four separate words. Many of the languages apparently have agglutinative qualities (like German, where you can just moosh more things on the end of a word to make a new one) as well as their cultures having a lot to do with snow (and thus likely having more jargon around it) leading to people running with ever-increasing numbers of words for snow that these "rudimentary" people had for "such a simple concept".