Is This Real Life, Is This Just Fantasy...

I'm reading The  Cold, Cold Ground by Adrian McKinty at the moment and loving it.  Inadvertently, I find I'm on a real Troubles NI fiction kick at the moment.  This novel, as well as The Ultras, which I wrote about previously, are set in Northern Ireland in the 70's and (in the case of The Cold, Cold Ground, 1981) and both reek of cordite, boiled cabbage, bad haircuts, and ingrained hatreds.  Cheery reads, both...  But both evoke the period and the place(s) of the North brilliantly, particularly the sense that nothing was what it seemed and every act was believed to be driven by shadowy angencies with competing agendas.  Another thing both novels share is their use of 'real' characters from history in their narratives.  In The Cold, Cold Ground, Gerry Adams himself makes an appearance and not, I might add, protesting the 100€ Household Charge.

This got me thinking about the use of characters and events from 'real life' in fiction.  I've done it myself in Peeler and, most recently, in the forthcoming follow-up, Irregulars.  I generally, however, find it restricting and fictionalise characters from history, changing names etc.  (As does McKinty in Cold, Cold, introducing us to a certain Mr Scavanni, Sinn Fein spokesman and/or head of the IRA's Force Research Unit (Nutting Squad, I believe they called it)...would anybody care for some steak with that knife?)  I do this mainly because it allows me the freedom to have them act the way I want them to so as to suit the writing--occasionally, they resist direction and act any old way they please but that's true of all fictional characters and grist for another mill--rather than for the writing to have to bend to the demands of the lives actually lived by the characters.  

McNamee seems to have solved this problem in The Ultras by making Robert Nairac a cipher of sorts, an almost mythical construct framed by the (perhaps) delusional documenting of past crimes undertaken by the fallen cop Agnew.  This works (for me) because so much of the work done by men like Nairac and his (possibly) MI5 handlers in the book, as in real life, is mired in secrecy and rumour.  The violence is shadowed by the darkness of the cold ditch, by the quiet, lacerating shame of the compromised informer, by the black hatred of sectarian pseudo-gang set loose on the innocent and not so innocent.

Other authors do this as well.  Ellroy, particularly in American Tabloid.  Alan Furst.  Many others.  My question, I suppose, is: why we do it as writers and why, as readers, do we seem to enjoy reading about 'real' figures in a fictional format?  Is history not enough for us?  Is fiction better able to elucidate truth than the hard data of documentation?