– Professor Menachem Friedman, "Habad as Messianic Fundamentalism," in Marty, "Accounting For Fundamentalism," U of Chicago Press, 1994.
I would add the "friends who surrounded" the Rebbe in his youth mostly left Orthodoxy; those that remained largely left Chabad and the hasidic movement, and none of them really could be called "friends" – the Rebbe was a loner by choice from his youth. I would also add that many of the elder statesmen of Chabad opposed the Rebbe's ascent to leadership and the younger hasidim who carried him to leadership viewed the Rebbe in superhuman terms – something elder hasidim largely did not.
Chana Gourary, the 6th rebbe's eldest daughter and an opponent of the Rebbe, Menachem Mendel Schneerson told the story of Mendel Schneerson this way (this is a paraphrase, not a direct quote unless indicated):
I asked my sister (the Rebbe's wife) what would be after Mendel left this world? Had he taken any steps to assign leadership? My sister asked Mendel. He replied to her in French, "After me, the deluge."
The Rebbe brooked no criticism. His aides were not allowed to question. He had little contact with any person not under his power. He could fire, banish or shame anyone he dealt with at will. He was their father and grandfather, their employer and taskmaster, and he controlled destinies like no other Jewish leader ever had.
The Rebbe had no regular contact with other rabbis or Jewish leaders. And as the few remaining elder hasidim who remembered the 6th rebbe (and, more importantly, remembered his cousins, the other Chabad – as opposed to Lubavitch – rebbes who had competing hasidic courts), he became judge, jury and court of appeals, all unchallenged, aloof and willfully alone. He spent far more time 'conversing' with his dead predecessor than he did with live human beings – especially with live human beings who would have dared to question him.
As the Rebbe became more isolated he became more extreme. He believed his own PR, so to speak, and his movement grew more cult-like. A case can be made that, in the aftermath of his first stroke, Chabad crossed the line (i f it had not already done so earlier) from a Jewish, if unusual, religious grouping to a cult with Jewish trappings but a particularistic ideology and theology distinct from mainstream Jewish tradition.
In a Jewish world less concerned with raw numbers and more concerned with theology and history, the Chabad created by Mendel Schneerson would be properly viewed as a cult and he as a cult leader. But numbers – "continuity" – are today more important than truth or fealty to any historical model or article of belief.