By "dubious" I don't mean implausible necessarily, I just mean it's unsupported by hard evidence.
When I see statements like "tradition has it," that always strikes me as dubious, especially when the local chamber of commerce has an interest in the commercial benefits of increased tourism. My hunch is that if there was stronger evidence than "tradition has it," the sign would have conveyed that.
It would be interesting to know if there is evidence of an historical John Hardy who did--or did not--live in the right time and place, and I might even look into that. But it could very well turn out that John Henry is a mythical allegorical creation, like Paul Bunyan.
But knowing no more than I know right now, I think "dubious" is the right word for the time being. To put it another way, I am highly skeptical.
_________________
I don't do it for the money, babe. I do it to entertain people.-- Susan Boyle