Sorry, but you really can't say that about Kevin James, I've known the man for over 30 years and know for fact that most everything he does is original or at minimum, his heavily modified version of a classic.
I will preface this with the fact that I have not seen many stage acts and honestly don't watch that many magicians in general. But, in my lifetime I have never seen a 'big box' illusionist that has really changed the game, other than maybe Penn & Teller (Mostly Teller). As soon as a box comes on stage, I lose interest because the workings of the illusion are basically the same no matter what the set dressing is.
Kevin James doing a broom suspension with a little janitor is still just someone doing a broom suspension. I've seen it. Repeatedly. Origami, Bump in the Night, Asra, Assitant's Revenge ... half the performers out there don't even bother painting the prop so at least some of these guys do that. What I've seen of James strikes me as what I've seen of everyone else. It doesn't matter if his methods are amazingly original, fast, clever or what have you, because it just looks like boxes on stage and women in glittery dresses. I can pull up videos from when I was a kid and the overall feel is the same, there's just different costumes and less hair.
I think a magician could win AGT so long as he's willing to play their game and that's the real rub; the pay off isn't as grand as they make it sound, there's a ton of artist control that goes on after the contest and that's why you see people walking away. You'll also find that some acts are actually hired by the producers to come in and do X number of shows just so there's some decent stuff in the Tv aspect of the show. . . C'mon, look at some of the acts they get, far too many are obvious set-up filler gags while other acts reveal sophisticated tightness. The real problem for magicians & mentalists alike, is that you have 90 seconds; to do justice to a legit sequence that's simply not enough time; too much rushing and too many opportunities for risk/accident.
I honestly don't think a magician could win, largely because the judges won't let them. On top of the Hollywood BS you mentioned, Craig, and the limited performance time, there would have to be an act that's interesting enough to the general public to try to create a big show out of it. I've never seen anything that fits that bill that would work on AGT.