What somewhat separates this discovery from those of, say, James Frey's work, is that Sedaris has always admitted punching up his stories because he is, above all, a humorist. Nonetheless, it also serves as a reminder of one fact that too easily gets overlooked in these sorts of discussions: Writing good nonfiction is hard. Figuring out what happened and how, relying on the evidence before you, fealty to the facts -- these things make nonfiction, to my mind, far more difficult than fiction, and thus when pulled off well, more compelling. Fiction requires a tremendous imagination. Nonfiction requires something greater -- tremendous precision and a willingness of a writer to give himself to reality. Imagination plays a role in the best nonfiction as well, but that imagination must serve the larger good of truth, something that can be far more difficult to piece together than most people realize.
I suspect that because of his ouvre, and because he never denied making up elements of his work to improve the stories, Sedaris will emerge from whatever stink this stirs up cleaner than Frey. (Though as I recall, Frey returned to the bestseller list as a result of his unseemly kerfuffle.) But I wish that even more than writers, who oftentimes do not categorize their work, editors and publishers would do their due diligence and not try to wedge work into the nonfiction pile if it does not belong there. I would be happy to see "creative nonfiction" become a designation if we need a compromise. But calling something "nonfiction" really ought to mean something fairly specific even if that label does not need to be limiting.