Why do we hold AI to a higher standard than humans? It's the same with self driving cars. "Oh it had one accident, must not be safe!" and yet humans have 100s of accidents a day.
The main problem here is expectations -- everyone expects the machine to be perfect, and when it's not, it breaks expectations. In the past, machines were generally a lot more accurate, they just didn't do a lot of stuff. Now they they can do a lot more stuff, their accuracy is coming down to human levels, and it throws everyone off.
I don't think we need to fix hallucinations, we need to fix expectations.
Humans don't have 100% perfect recall of every fact they've ever learned, why do we expect AI to?