Throughout their history, movies have been talked about in terms of dreaming: studios are "dream factories"; Hollywood is "the land of dreams". But scanning the list of contenders for this year's Oscars, such descriptions feels misplaced. The most striking thing about the leading films of the last 12 months is how many draw their inspiration from fact.

The leading Oscar contenders, The King's Speech and The Social Network, both offer fictionalised portraits of familiar but enigmatic public figures – a monarch and a monumentally successful entrepreneur. But it's also true of other hotly tipped releases such as The Fighter (about boxer Micky Ward) and 127 Hours (about rock climber Aron Ralston), as well as films still to hit our screens such as The Conquest (about the early life of President Sarkozy) or next year's Freddie Mercury movie starring Sacha Baron Cohen.

Is this glut of fact-based films a coincidence, or is something fundamental going on? Artists basing work on real people and events is hardly a new phenomenon. Shakespeare was very good at it, as Henry IV and Richard III attest. In Paradise Lost, Milton fictionalised the lives of two figures then regarded as historical: Adam and Eve. One of the greatest of all films, Citizen Kane, was inspired by the life of William Randolph Hearst. Even so, there has been a shift in recent years away from works of pure imagination towards ones that combine fact and fiction. This has been the case in every story-based medium.

Take literature. By far the most successful British novel of the last two years (if you measure success in terms of acclaim as well as sales) has been Hilary Mantel's Booker-winning Wolf Hall, based on the life of Thomas Cromwell. Though a superb literary achievement, Wolf Hall is also not unlike The King's Speech (or indeed The Social Network) in the way it takes a factual story whose contours are already familiar (in this case, the reign of Henry VIII) and attempts to unmask the private truth behind it. It is far from being alone. Accompanying Mantel's novel on the 2009 Booker shortlist were Adam Foulds's The Quickening Maze, about the poet John Clare, AS Byatt's The Children's Book, whose heroine is modelled on the writer E Nesbit, and Simon Mawer's The Glass Room, set in a (real) modernist villa in 1930s Czechoslovakia. Howard Jacobson's two closest challengers for last year's Booker likewise drew their inspiration from real events: Peter Carey, in Parrot and Olivier in America, fictionalised the life of Alexis de Tocqueville, while Emma Donoghue, in Room, gave us an imaginative response to Josef Fritzl. This spring the trend continues, with novels about Herman Melville (by Jay Parini), HG Wells (by David Lodge), and Princess Diana (by Monica Ali), to name a few.

Television and theatre are no different. In recent times BBC4 has churned out endless biopics whose subjects include Fanny Cradock, Kenneth Williams, Enid Blyton and Barbara Cartland. There was the Channel 4 drama The Deal (in which Michael Sheen made his debut as Tony Blair) and the Yorkshire Ripper-inspired Red Riding Quartet. In coming months, there's a BBC2 drama about the Munich air crash and an ITV film about Fred West. On stage, there's been the revival of political theatre, not to mention the spectacular success of plays such as Frost/Nixon and Enron.

What has prompted this flood of fact-based storytelling? The reasons for these kinds of cultural shift are never easy to pinpoint, but this one surely has a lot to do with changing ideas about privacy and truth. Over the past decade or so we have, as a culture, become much less attached to the idea that certain aspects of life should remain private. An increasingly intrusive press regards it as its job to sniff out the secrets of the rich and famous. Respect towards those in positions of authority has dramatically declined. The result is that a terrain to which entry was once largely barred – the private lives of those in the public gaze – has become accessible. And this has given new licence to artists. Even a decade ago, it would have been hard to imagine a film like The Queen – dealing with the relationship between a living monarch and a serving prime minister – being made. Now finding yourself in a novel or film is one of the hazards of being famous.

This scaling back of the private sphere has coincided with something else: a growing belief that it is in personal relationships and feelings that the important truths about the world are to be found. While the concept of a public facade has always existed, it has never held greater sway than it does today. Most people intuitively feel that the majority of what is reported – in newspapers, history books, government documents – is false, or only partly true, and that the important stuff happens behind closed doors, or inside people's heads. This is reflected in the way the New Labour epoch is discussed, with an overriding focus on the relationships between the protagonists and, often, their psychological states.

Yet this belief in a private domain where ultimate truth lies creates a problem. For we can be fed endless information – diaries and memoirs, leaked diplomatic documents – but none will necessarily tell us what went on. The apparatus of factual exposure habitually falls short. This, of course, is where art comes in. Artists may not be better acquainted with the truth than anyone else, but they can do something that others can't: describe plausibly what might have happened.

So much for the causes of our new fondness for factual drama. It is a trend to be welcomed or deplored? It may seem odd to begrudge artists any new outlet for expression that helps them pay the bills. Yet we would do well to be aware of the limitations of fact-based storytelling and recognise the confusions it can produce.

For one thing, if interest in a work of art is triggered by a desire to learn about real events, that represents a radical shift in our understanding of art's purpose. Throughout history, people have turned to art for various reasons, but two consistent ones have been a desire to be entertained or transported and a desire to learn more about what might be called (for want of a better term) the human condition. Yet in a world of docudramas and biopics, another factor enters the picture. Storytelling becomes a kind of lightweight pedagogical aid – almost a branch of investigative journalism. The risk here is that, by being placed at the service of factual knowledge, creativity loses its justification and becomes devalued as a result.

We can see this tendency at work in a comment made in 2009 by BBC4 controller Richard Klein, who defended the channel's reliance on biopics as follows: "As a small digital channel, it's hard to get anyone to come and watch pure fiction that no one has heard of before. Basing our dramas on factually based stories, we can re-examine and reinterpret, but people already have an interest." This depressing statement sums up an attitude that is creeping into our discourse, which is that a good story, on its own, isn't enough to "hook" people; that films, novels and dramas need to be bolstered by topical or historical "relevance".

If the rise of fact-based fiction creates confusion about the point of art, the same applies to our criteria for judging it. A work that re-imagines events becomes subtly different from one that makes up a story. As we saw last week with the "Nazi whitewashing" accusations thrown at The King's Speech, purely aesthetic judgments compete with other questions: how skilfully the storyteller re-creates the past; what version of history is being presented. The inevitable result is that attention is transferred from the work to the skill of the film-maker or writer. There's a necessarily self-conscious quality to films such as The King's Speech and The Social Network and this limits their ability to transport us.

Clever and interesting though such works may be, the truth is that, by the highest standards of art, they are meagre offerings that cannot escape the confines of their reality-bound aspirations. Against them, it is worth considering other recent, truly great, historical films, such as Michael Haneke's White Ribbon, or Paul Thomas Anderson's There Will Be Blood, or indeed a historical novel like Colm Tóibín's Brooklyn. All are mind-blowing precisely because they are works of imagination that, while set in the past, don't tether themselves too closely to events. The King's Speech and The Social Network may deserve admiration, even acclaim, but in our headlong rush to celebrate them we should bear in mind that great art strives for more.