Why do we say "Truth is stranger than fiction"?

Meaning:

Sometimes the facts can be harder to believe than fiction

Background:

The first recorded use of this expression in its modern form is in Lord Byron's Don Juan (1823):

'Tis strange -- but true; for truth is always strange;
     Stranger than fiction; if it could be told,
How much would novels gain by the exchange!
     How differently the world would men behold!
How oft would vice and virtue places change!
     The new world would be nothing to the old,
If some Columbus of the moral seas
Would show mankind their souls' antipodes.

- George Gordon Byron (Lord Byron), Don Juan, Canto the Fourteenth, Verse 101

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