I agree with you. A little embellishment of innocent facts for literary purposes is one thing, especially when the result doesn't distort history. What I don't like is taking someone's name because it is "cool" and then writing a crappy book around her.
The limits you are described are based on historical fiction, whether in verse or prose. The book I take offense with is in no sense historical fiction and will leave people with some incorret ideas of what happened in Salem in 1692. She essentially say that my ancestor was a real witch.