In this great feature by George and Robert Leonard (unfortunately constrained by third-person patina), two members of Sha Na Na talk about how they essentially created the image of the '50s that much of later pop culture (Happy Days, Grease) has been based on.
In it, they link other ersatz historical conceptions, such as the Scottish Highlander or Tokyo's sukiyaki, and Voltaire's concept of history being defined by what people want from the past.
But the most interesting thread to me is the connection of Sha Na Na to the rise of the Reagan Republicans, who latched onto the idyllic '50s image of sock hops and malteds (disturbed only mildly by working-class greasers) in a bid to reinvent a fairly frightened and ghastly decade of American society.
It is this image that cultural conservatives still seek to return to, and I think the challenge of those of us who consider ourselves progressives is to articulate both why the past is so distasteful (cold war bomb drills, segregation, limited rights for women, etc.) and why the future can be better by having space for competing visions of progress. I think that this goes against both the critical impulse to focus always on injustice and the generally pessimistic worldview of liberals—I know that a large part of my support for Obama doesn't come from truly believing that he'll make things better, but rather that he will avoid making things worse. But that won't convince people who truly believe that the past WAS better—there needs to be an alternate vision.