I have a lot of friends who tuckerize, or even kill off people who have hurt them in their fiction. Sometimes they auction off naming for a character for charity. Sometimes a friend just works his/her way into a story. I found myself a member of the NYPD a few years ago, which was kind of interesting. I have nothing against having real-world names or real-world people showing up in fiction; I sometimes find it distracting, if it’s a real-world name or person I personally know, but that’s not enough reason to demand a practice be stopped. I don’t kill off my enemies (wait, I have enemies?) or exes in my work, but again–that’s me.
I’m particularly unsettled by the notion of using my own history as the basis for fiction. I was raised in a family where part of the dysfunction was “don’t talk about family outside of family.” In practice, this means that I’ve got a ton of colorful anecdotes about my upbringing and my family (many of them appearing here under the tag “Raised in a Barn”). But the stuff that was colorful but negative? That’s the stuff I cannot bring out. The people I’d throw under my fictional bus? Can’t do it.
History is personal. Even so mild an anecdote as A Christmas Tree, or Objects in the Mirror May be Larger than they Appear got some push-back from my brother, who remembers the incident differently. I’m really far happier making people and situations up. What I don’t always make up is little things–a response, a behavior. Not whole people. But basically, I don’t want to get into a wrangle with someone who comes back saying “That’s not how it was at all!.” The phrase “it’s fiction” doesn’t always help in such situations.
Of course, you can make up every single thing in your work, from plot to character to dialogue, and someone may still say “That’s based on me, right? I knew it!” And protest how you may, that person will not believe it.
Write the way you want to write; take inspiration where you find it. Me, I’ll be over here in the corner with my imaginary friends.