Seems to run contrary to the concept of human memory being supremely unreliable, and that our subconscious has a tendency - beyond the feeling everyone's familiar with of memories being "vague" and "difficult to remember" - to actually edit and reshape the concrete details from the way they actually happened. Obviously, given a certain context, this can result in terrible consequences. I remember this being discussed at length in the book "Subliminal: How Your Unconscious Mind Rules Your Behavior"[1] w/r/t eyewitness testimony of criminal acts, but perhaps in some cases, our distorted perception of reality may be a important mechanism to our own self-esteem, provided that it doesn't go too far.

[1] https://www.amazon.com/Subliminal-Your-Unconscious-Rules-Beh...

There's also a good book called Subliminal that discusses the neuroscience of how our subconcious brain make decisions that we often believe we made ourselves.

http://www.amazon.com/Subliminal-Your-Unconscious-Rules-Beha...