James was in outstanding form at Vicarage Road, pulling off two superb saves to help Villa take all three points and condemn the Premiership new boys Watford to a third league defeat of the season.
But that did not stop Taylor from leaping to the former Liverpool keeper's defence and knocking the critics who labelled the 29-year-old "Calamity James" during his troubled spell at Anfield.
The former England manager reserved his strongest criticism for television pundit Mark Lawrenson's comments earlier in the season.
"I saw Mark Lawrenson on Football Focus at the start of the season saying Liverpool had got rid of Calamity James and I don't think those comments are right. They're not called for especially from a former professional," Taylor said.
"I felt David was treated rather harshly during his spell at Liverpool, where it seemed one week he was the England goalkeeper and the next he wasn't in the squad with five goalkeepers picked.
"He was getting a lot of stick, and that's very difficult to take, particularly when you're a goalkeeper. He played one game for England against Mexico [a 2-0 win at Wembley in March 1997], didn't concede a goal and never played again."
Taylor would not be drawn on whether James deserves an England recall when Kevin Keegan names his squad for the Euro 2000 qualifiers against Luxembourg and Poland.
"I had too many people telling me who should play when I was England manager," he explained. "But David has had a fresh start at Villa and it was always likely to happen that an old player comes back and plays so well against you.
"I thought we deserved something from the game but he made two great saves from Michel Ngonge and Tommy Mooney."
Villa's manager John Gregory was equally quick to praise James' display, which kept his side in front after Mark Delaney's 68th-minute goal.
Gregory has described the pounds 1.8m signing of the 6ft 5in goalkeeper as "a bargain" and added: "The performance on Tuesday epitomised everything he's done for us.
"He's come in with a great attitude to get his career back on track, he's determined to get back in the England squad although he knows it's not the be all and end all, he wants to do well for Villa first.
"What you saw on Tuesday is what I've seen every day since he's been at the club," he added. "We all know he's an outstanding talent. The defenders in front of him have done their job and allowed him just to get on with his."
James made 89 appearances for Watford after signing as a schoolboy before moving to Liverpool for pounds 1m in 1992.Reuse content