Those that do not learn from history, are bound to repeat it.
I think that passing down the history of a MA is crucial for the practitioners to get a TOTAL understanding of the art.
I think it makes a difference to the student when he learns that his art was founded and developed by fighters as opposed to being developed for other reasons.
I think it matters to understand if a system has a military background or a civilian background as that can help one understand certain principles and tools in the system.
Students just need to be told HONESTLY what a systems history is, which parts are true and which are not and which are just color and flavor for storytelling.
Psalms 144:1
Praise be my Lord my Rock,
He trains my hands for war, my fingers for battle !