There's a couple things wrong with this theory that I'd like to point out - the amount of unnecessary effort the two guys would have to go through when they could just have got it out of the way immediately, disposing of the video evidence (let's not forget that the footage was discovered beneath the foundation of the house you see - a house that, according to history, burned down, the fact that Mike and Josh never returned to their families (at least according to OFFICIAL media for the franchise), and the biggest point of all, that Heather actually SEES a creature in the woods at night that is presumed to be the Blair Witch - something that would be too difficult to convincingly stage.
So here's an alternate theory for you which is partly adapted from someone else's theory and partly from the "official" reading of the story - Josh and Mike conspired to spice up the documentary a little by adding a few additional scares for Heather (the other theory suggests they were planning on taking the film footage for themselves) up to a point, after which it is the Witch manipulating the pair into luring Heather into the house to kill all of them. This doesn't necessarily negate the theory but it certainly ties in better to the 2016 sequel, which is something Matpat didn't even try to do despite knowing full well that the movie would undoubtedly involve the witch in a very real way.