The Oscars are not awarded for historical accuracy. Best adapted screenplay does not mean most faithfully adapted, it just means the best screenplay which is adapted from some source (often fictional).

Hollywood is in the business of telling stories, not teaching history. If you get offended by lack of realism or accuracy, then don't watch Hollywood movies. I can't think of any Hollywood movie you couldn't criticize for twisting reality to further the narrative.

"Based on a true story" should always be taken with a large grain of salt and Hollywood itself have often satirized it - e.g. Fargo slapping a "Based on a true story" sign on a wholly fictional story, or American Hustle stating "Some of this actually happened!"