Whether your diaphragm should be treated as rigid or flexible should rightly be something that you determine rather than arbitrarily decide. That said, I arbitrarily decide flexible unless I suspect that rigid will be expedient for me for some reason.
I can think of two possible origins for the total shear method:
1) Low rise masonry and concrete shear wall design from the old days (long walls). Since squat walls are generally dominated by shear flexibility, it was common -- and reasonably accurate -- to assume that load would distribute according to wall length. That, because stiffness was more or less a linear function of wall length. In this case, the method would only work if the center of load aligned with the center of rigidity. Fat chance nowadays.
2) For walls that can be assumed to yield in a ductile fashion, there is a school of thought that says that you can ignore building torsion effects for seismic because the diaphragm's own rotational inertial will keep it from twisting under transient inertial loading. I've never actually employed this and would expect it to have a pretty limited range of applicability. None the less, I believe that one of the SEAOC seismic manuals contains an example of this method.
I like to debate structural engineering theory -- a lot. If I challenge you on something, know that I'm doing so because I respect your opinion enough to either change it or adopt it.