Fair enough. "Pre-history" is a nice way to put it. The fantastical elements were relegated to an unverifiable past. They weren't disbelieved per se, but they were compartmentalized differently than recent history, which relatively lacked fantastical elements and could be verified.I don't know to what extent it's really so, but it appears that Greeks regarded their myths as history.
It may be more accurate to say that they saw their myths as pre-history. They certainly believed the persons in these myths did exist and the events recorded did occur but this doesn't prove their conception of history was significantly different to our own.
I'd say, though, that I have a certain amount of doubt whether "our own" conception of history is so different from theirs. We believe (in this country) that Washington "could not tell a lie," as shown by the mythical incident of the cherry tree; we believe that Lincoln "freed the slaves," which only happened after his death; we believe that Puritans came to this country seeking religious freedom, when in fact they came seeking a place where they could impose their (purer) vision for the Church of England; we believe that the colonists (apart from a handful of loyalists) unitedly sought independence, when historians agree that only 10-15% were in favor of secession in 1776; we believe that Roosevelt ended the depression by joining WWII, when in fact our prosperity in no way increased until some time after the war (we just failed to notice, because our rationing books were part of the "war effort," and our young men were dying in Europe, rather than idling on street corners). Our "knowledge" of US history is a complete hodgepodge of myth, propaganda, and selective ignorance. Less outlandish than Greek myths, perhaps, but different only in degree, not in kind.
Far more people believe the folk version of US history than the historians' version, and they persist in believing it even after they've been told the truth. My sixth-grade teacher told us as eleven-year-olds that the Emancipation Proclamation applied only to confederate territories, where of course it had no force; that slaves in Union territories like West Virginia were not freed; and that the intent of the Proclamation was to prevent England aiding the South, with which it appeared likely to do, having strong sympathies in every area except the issue of slavery. Of those forty kids, how many still believe that "Lincoln freed the slaves"? Most of them.
The line between myth, folk tale, and propaganda seems blurry to me. All are types of falsehood that are sort of believed, but somehow compartmentalized in a way that avoids empirical verification. It is of course true that we have changed our attitude to "history" somewhat, and we now insist that our "myths" be packaged in a much more believable form. And Americans, perforce, have no interesting "pre-history," because in prehistorical times we lived in England and Holland, and that was only about 300 years ago.