Judging historical artworks within historical categories seems, in general, like a Good Thing, but it leads sometimes to unanticipated conclusions. I've been working (i.e. should be working right now) on Osbern of Canterbury's late 11th century life of St Ælfheah, most of which is made up. That isn't that uncommon in hagiography, particularly in periods when saints' lives were being written wholesale. And for me, as a modern literary scholar, this is quite interesting—vitae fabricated from a few historical records and a general sense of what a saint ought to have done tell us quite a bit about notions of genre, historicity, etc. during a given period. But, by the standards of an era that more or less rejected fictionality—at least overtly—these "imaginative" saints' lives are, in effect, lies.
Of course we could say that (like fiction of any sort) they're indicative of a "higher truth", and so forth. But unlike a novel (or at least, most novels), these texts frequently are intended to mislead—about the facts of a saint's historical life, if nothing else. It was no doubt meant well, as a way of promoting the honor of the saint and the religious community—but most liars say they do it in a good cause, don't they?
Suppose we did accept "The Life of St Ælfheah" as a lie. What then? How do you judge a lie aesthetically? Surely verisimilitude isn't the only standard. And how much of the truth do we have to know in order to assess the qualities of a given lie? Osbern didn't seem to know much about Ælfheah; to be fair to him, he conformed to the historical record whenever there was one (though he also implied that it was all historical).
But it seems to me that considering Osbern as a most accomplished liar adds an exciting dimension to his prose. Lots of medieval (and for that matter, modern) authors are liars, when you think about it, and considering their lies as either proto-fiction or pseudo-history seems to flatten out their quiddity. The fine art of lying deserves to be appreciated on its own terms.