On folklore

It is common practice with any group to see stories swell in their scope with every telling. Facts become blurred, and certain truths are lost. The “fish” gets bigger the longer it's been since it got away. This happens for several reasons, not the least of which is the way our memory works so that only those things that most strongly impact us are held strongly in our minds while everything else becomes blurred. As a result things that felt huge at the time become ever larger in our minds as time goes by.
This mental phenomenon is only one part of the change in stories. The other is the so called “poetic license”. Storytellers need to enrapture their audience one way or another, and a very simple and effective method is to make things viscerally powerful. Things that are larger than life jump out at us and capture our attention. We all wish we could be the mighty hero who overcomes incredible (often impossible) odds, going far beyond the limits of ordinary humans (and well beyond the laws of the natural world). Thus a brave man who performs a bold act slowly becomes a superhuman warrior of legendary feats, a hero immortalized for many generations to come.
Lastly, over time, we hear the same story so often that we become accustomed to the bold act, becoming desensitized to how amazing it truly was. Like a junkie who needs increasingly higher dosages, the deed needs to become greater with each telling in order for the audience to continue to be impressed. As a result stories and feat become ever greater in a constant exercise of “one-up-manship”, a perfect example of which is Monty Python's skit about a group of older gentlemen who complain about the ungrateful nature of the younger generation who don't appreciate how much easier their lives are as opposed to the difficult childhood each of these men experienced. They then take turns telling how horribly difficult their lives were, each one worse than the last. Things quickly go to ridiculous extremes, with the gentlemen claiming their entire 20 member families lived in a shoebox in a whole in the road, worked 36 hours each day at the nearby mill, without food, then returned home and were killed by their father before going to bed each night.
Cultural tales of heroism suffer from these same phenomenon, doubly so the stories of mythical martial artists of the past. As I mentioned earlier this comes at the cost of losing important an important truth, since the feat has been blown so completely out of proportion we can't really know what the true original feat was. Without a realistic measure of what happened we can't know what truly happened, and therefore we can't gauge how truly great the ancient deed truly was in comparison to our own efforts.
However not all truth is lost. The dramatics and theatrics that obscure the realism of the tale also work to highlight lessons and teachings. The oral stories and traditions should not be blindly accepted as factual truth, but rather as moral stories. They can highlight important messages and teachings. They may simultaneously preserve and obscure unexpected applications of certain movements or techniques. They preserve an ideal (and therefore impossible) goal for the individual practitioner and the art as a whole, which functions as the carrot on a stick that helps them continuously move forward and evolve, always striving to improve.
Therefore listen to the stories, to the myths and legends. Hear them carefully and with a critical eye and you will find nuggets of wisdom and great lessons. In this way they become more than blindly believed tales, they becomes lessons to help us learn to analyze and be critical thinkers rather than to be indoctrinated fools. Listen and be mindful, open your heart, your ears and your mind; if you do you'll find that the tales become truly do become more amazing with each telling, teaching us more each time.