Why the profound memory loss in sleep?

I don't get the way my brain works during dreams. In dreams I'm never another person, I never have a different wife, and I never have different children. So why do my dreams get some things so wrong?

During my dreams I'm often in my house. Understandable of course, except that it's never actually the house I'm living in right now. Most often it is one of my childhood homes. Why doesn't my brain say, "hang on, I haven't lived here since 1977"?

A couple of nights ago I had a dream when I ran into my father. I told him that he was looking much better than the last time I saw him. In the dream it ended there, but something has to be said. Well, duh, obviously he was looking better, because the last time I really saw him he was dead.

How can my brain forget something like the fact that my father is dead? Moreover, I'm 46 years old and he's still the only person I've seen dead.

I mean, sure, maybe I could understand why in my dreams I might drive a Ferrari rather than a Nissan, but the whole dead father thing seems like something that is perhaps a little more important. Ironically, I never actually drive a Ferrari in my dreams.

My brain sux.