Exactly.
I'm all for the careful taking of artistic license to convey the emotional truth of a setting. But license extends only to one's impressions of a scene, and not to the factual details. There's clearly a line, between the "truth" of one's impression and outright fiction, that Daisey -- and others like him -- feel pretty comfortable crossing these days.
For example, let's imagine that I've just come back from touring a very dour, depressing factory in Shenzhen. The place was subject to severe security measures -- creating an atmosphere that would have been quite striking to any foreign visitor like myself. In order to express the emotional impact of what I saw, I might consider the following two sentences:
"The factory was under such tight surveillance that a patrol of armed guards around its perimeter wouldn't have seemed out of place."
or
"The factory was under such tight surveillance that armed guards patrolled its perimeter."
Both sentences convey the "emotional truth" of the scene, but the second is quite obviously a falsification. What troubles me is how free people today feel to go with Sentence 2. In fact, leaping that seemingly fine line places the entire story squarely in the domain of fiction. And the work should then be labeled and presented accordingly -- both by its author, and by those who exhibit it on his behalf.
To your point, even if 90% of Daisey's story is factually accurate -- even if 99% of it is -- that little bit of fabrication calls the validity of the entire piece into doubt. And that's a damned shame. It's so easy, and so tempting, to take one small step and wind up over a gaping brink.