The fly-half will now see the Wales clash as a final chance to impress national coach Peter de Villiers, who has already said the match will put World Cup squad places up for grabs in a year that will provide limited opportunities for Springboks based overseas.
In a frank interview with the Bath Chronicle, James says he was left embarrassed and unhappy at how his hopes were built up by the Sharks, only for them to suddenly call off the deal.
"I'm not too sure where it broke down but it was pretty embarrassing for me. I think the Sharks were pretty disgraceful in how they handled the whole thing," he said.
"I can't have any moans with Bath - they were open to an offer. But the Sharks were pretty embarrassing in how they handled it.
"They made the initial chase and in the end it fell through, so it made me look like a bit of an idiot over here with my club and my team-mates. All of a sudden the Sharks closed the door."
The news will leave James desperate to impress if selected on 5th June after Springbok boss De Villiers said earlier this month that he is likely to pick three or four European based players for the game and gave strong hints that those players would be playing for their World Cup places.
"We don't know how good the overseas players really are because the competitions there are different," said De Villiers. "Those four games (South Africa's summer fixtures against Wales, Italy twice and France) are of critical interest on the road to the World Cup. By then we would have seen everyone in action."
And he hinted that the Test against Wales will be a chance for many of his players to cement their places in his plans, as well as being one of few opportunities for his Northern Hemisphere based stars to impress.
"The best South African team will play against France after that (the Wales Test). We will (then) consider players in South Africa for the Tri-Nations unless we have a situation where the locally-based player is not as good as the one overseas."
Money is understood to have been the stumbling block for the Sharks, with Bath wanting substantial compensation for losing James a third of the way into a three-year contract.
But the 31-year-old, who is nearing the end of his third season at The Rec, insists the recent disappointment will not detract from his commitment to Bath.
He now intends to see out the two remaining years on his Bath contract - barring another serious injury.
James is firmly in the running to play for the Springboks when they come to Wales next month, but will remain frustrated at how the move back to Durban collapsed