In A Separate Peace, memory is unreliable. It forgets certain events, changes others, misinterprets the truth and presents it as fact anyway. But memory also illuminates, because it…forgets certain events, changes others, and presents skewed reality as fact. The same problems with memory are also its assets, because it tells us what's important, what's not, and a whole truckload of info about whoever's doing the recollecting. Memory illuminates, even through the facts it leaves out.
That the narrative is told to us in retrospect inhibits our ability to understand Gene and Finny's relationship. The unreliability of memory means that we can't trust any of the tale.
That the narrative is told in retrospect provides us a greater understanding of Gene and Finny's relationship, since we benefit from the narrator's commentary and insight.