Making things up

I read this article in The Guardian in which PD James explains why she made up the location of her new book, an imaginary island off the British coast. The article's an interesting enough explication of the creative process of worldbuilding, but I still felt a bit confused; why did she need to 'explain' why she made up an imaginary island? Granted the 'explanation' is related to the fact that up until now everything she's written has been set in some real location, but something still rankled about it; 'explain' making a place up? Isn't making things up a fundamental description of what any writer does?

Maybe I'm being overly sensitive, but the first thing that came to my mind was a TV interview with Iain Banks - it might have been Late Review, and the interviewer might have been Kirsty Wark - and I recall she made reference to a passage in one of his (non-sf) novels where he describes a particular setting - a cliffside, maybe, next to the sea. She seemed genuinely taken aback when Banks explained he'd made it up and there was no such sea-side cliff, pointing out that 'that's what writers do'.

It got me wondering if there some aspect of mainstream literary culture that demands every setting for a story must exist in the real world. Did I miss a memo somewhere when I decided I'd rather just make shit up?