One might argue, though that errors are simply the price we pay in order to gain other advantages. Bear in mind that the errors arise because our memories are densely interconnected with each other; But they are the retrieval paths that make memory possible.
Reliance on schematic knowledge is a good thing; schemata guide our attention to what's informative in a situation, rather than what's selfevident, and they also guide our inferences at the time of recall. If this use of schemata sometimes leads us astray, it may be a small price to pay for the gain in efficiency that schemata allow.
The same blurring together that makes it difficult to remember episodes also makes it possible to think in a general way, to think about what's in common among diverse experiences rather thn what makes each experience unique. Without this blurring together, our capscity for thinking in general terms might be dramatically impaired.