Russell seemed to believe in the literal interpretation of those prophecies which foretold the return of Israel to the promised land. The early Bible students followed his lead. But Russell's mistake was trying to force interpretations according to the events of his day. Similar mistakes were made by many religious leaders down through history including the great Reformers.
In contrast to Russell, Rutherford allegorized those same scriptures and "spiritualized" the explanation by applying them to the "remnant" of the annointed believers. (Spiritual Israel) The Watchtower continues to hold to this practice.
There is a certain parallel in the history of the church. Early Christians held to the literalness of the scriptures such as the second coming of Christ. However, when the expected events did not occur within several generations of believers, certain leaders began to make an allegory out of most of the events in the Bible and applied it to the Church itself. A good example of this is St. Augustine and his City of God.
Most good Bible scholars feel that one should consider the literal meaning of scriptures first. Then, if other scriptures warrant, one may consider a spiritual meaning. However, one must be very careful not to impose one's own interpretation. And that seems very difficult for many religious leaders and organizations.