I really thought it was the hero worship thing. Jim seemed to me to be quite insecure. I think he needed to be told he was doing the right thing and that he was the brains behind Taggert Transcontinental. He loved Cheryl as long as she filled that role. When he realized it was really the work Dagny was doing that she respected he no longer had any use for her.

SPOILER ALERT

Cherryl was young and, based on what she was reading in the papers, unknowingly attributed all of the things she loved about Dagny to Jim. She thought Jim was the hero of TT.

To answer your question specifically, Jim was always jealous of Dagny and loved having someone see him as the hero for once. He also saw in Cherryl an opportunity to further solidify his "man of the people" narrative (e.g. Taggart marries shop girl) and he took it - as if to say, "See!? I'm a humanitarian. I'm a good person. I don't care about money! I care about people!"

Their whole relationship was one of Jim lying and concealing the truth all while attempting ever so subtly to sway her thinking...

“You bet I’ve worked hard. My work is bigger than any job you can hope to imagine. It’s above anything that grubbing mechanics, like Rearden and my sister, are doing. Whatever they do, I can undo it. Let them build a track—I can come and break it, just like that!” He snapped his fingers. “Just like breaking a spine!”

Cherryl was always taken aback by Jim's irrational outlook and could never reconcile who she thought Jim was with reality. And, she didn't realize the truth until it was too late.

Cherryl had the makings of a hero. Had Jim not robbed her of her potential, she inevitably would have made her way to the Gulch. She and Quentin would have been perfect for each other.

EDIT: Spelling