The Lotus Sutra is sometimes said to disparage the shravaka way and its emphasis on nirvana. And it is indeed true that some passages in the Sutra can be cited to support this view. For example, in Chapter 2 we can read:

For those with dull minds
Who want lesser teachings,
Who greedily cling to existence,
Who, after encountering countless buddhas,

Still do not follow
The profound and wonderful way,
And are tormented by much suffering –
For them I teach nirvana. (LS 86-7)

But passages of this kind are rare and, while they are one way of looking at the matter, they do not represent the overall view of the Lotus Sutra, which is basically that shravaka teachings are an important step along the Buddha Way. Already in Chapter 1 we can find:

By various causal explanations
And innumerable parables,
[The buddhas] illuminate the Buddha-dharma And open understanding of it to all.

Or weary from age, disease, or death,
For them they teach nirvana
To bring all suffering to an end.

The shravaka way certainly is not being belittled or disparaged – after all, it brings suffering to an end. For those who sought to be shravakas he taught the Dharma of the four truths for overcoming birth, old age, disease, and death, and attaining nirvana.

Thus we find references to this shravaka nirvana as “incomplete nirvana, or as what shravakas “think is nirvana.” Not surprisingly, we find contrasting terms in the text as well, such as “ultimate nirvana.”

At one point in Chapter 7, the Buddha says, “the nirvana that you have attained is not the real one!” This implies, of course, that there is a greater nirvana of some kind. This greater nirvana is often characterized in the Dharma Flower Sutra as “buddha-wisdom.” The shravaka nirvana, the Buddha says, is “only close to buddha-wisdom.” (LS 199) Sometimes the text goes further, declaring that real nirvana is a matter of being a buddha. Thus, at the end of Chapter 7 we find:

When I know they have reached nirvana
And all have become arhats,
Then I gather everyone together
And teach the real Dharma.

Through their powers of skillful means,
Buddhas make distinctions and teach three vehicles.
But there is really only one Buddha-Vehicle.
It is for a resting place that the other two are taught.

Now I teach the truth for you:
What you have reached is not extinction.
To gain a buddha’s comprehensive wisdom, You have to make a great effort.

When you have gained comprehensive wisdom,
And the ten powers of the Buddha-dharma,
And acquired the thirty-two characteristics,
Then that is real extinction. (LS 206)

Thus, what is taught in the Dharma Flower Sutra, and in the parable of the fantastic castle-city, is that an experience of nirvana that leads you to think you have accomplished all that you need to accomplish is always an illusion. Yet, while it is an illusion, it is not necessarily a bad illusion, since, by providing a resting place along the way, it can enable people to pursue the greater goal of acquiring buddha-wisdom, of becoming a buddha. Resting places can be illusions and escapes, but they may be both useful and necessary. Without them many people, including ourselves, might not be able to continue on the way. We should not, then, be too critical of resting places, especially of the resting places of others.