McCabe's character
One of my favorite movies. So many subtleties. And we're never really sure just who McCabe is. We see that he was not particularly bright. But he was savvy enough to quickly become the most successful and leading businessman of the small wilderness town. That made him a big fish in a small pond, and he was totally out of his element dealing with the corporate types who wanted to take over and profit from what he had created.
It's interesting that when he first arrived, the men in the bar were impressed that McCabe wore a gun but he denied being a gunfighter. Sheehan claimed to have heard of him and thought he was a gunfighter who had killed Bill Roundtree (who "was nobody to mess with") with a derringer, and that McCabe had "a big rep." McCabe denied killing Roundtree, it seemed Sheehan was foolish to think that, and Butler thought it was ridiculous that McCabe could ever have killed anyone.
But ultimately, Butler winds up on the wrong end of a derringer in McCabe's hand. The use of the derringer in that scene strongly suggests that McCabe was indeed the man who had killed Roundtree as alleged. Which brings his entire past into question. In fact, in the funeral scene, Keith Carradine's character arrives at a time when McCabe fears that the corporation will send someone to kill him. McCabe fearlessly confronts Carradine with his hand near his holster and it is Carradine who is frightened.
These events subtly suggest that there was more to McCabe than he wanted people to think. We don't know where he came from but he may indeed have had a rep as a gunfighter and probably did kill Bill Roundtree with a derringer. (What are the odds that the story falsely circulated but he just happened to carry such a weapon?) But he was clearly frightened of the 3 killers. Perhaps he had gained a reputation as a gunfighter in some other small town where it didn't take much to get a rep. After all, the men in the bar were impressed just that he wore a gun, as this was 1902, not 1870. And just as McCabe was the best businessman in the small town but out of his element with the more ruthless Sears and Hollander, he also knew he was in over his head with the 3 killers. But that doesn't necessarily mean he hadn't previously been the big fish in a small pond when it came to using a gun.