No, women really don't forget the details of their births. Ask any elderly woman about her births, and she will give you every minute detail, even 80 or 100 years later.
Back in the 70's, the OB industry was not above slipping a drug cocktail to women who had just given birth with an epidural, with or without their knowledge...it kept them nice and quiet...so your mother might have been drugged without her knowledge and forgotten a lot of details due to the drugs. They do it less, but they still do it now too. Lots of women who've just had c-secs get drugged through their IV line and go to sleep, thinking they were just very tired, and then miss the first hours of their newborn's life because they just can't wake up.
As for turning "blue" from an epidural...that was probably a precipitous blood pressure drop. Yes, you can die from that...I nearly died from my first epidural too. The blood she received was probably to replace the blood she lost during delivery (forceps and the episiotomy to use the forceps can cause a LOT of bleeding) and not really related to the epidural itself.
There are many reasons why the c-sec rate has gotten so outragiously high. Many of which have to do with lawsuits and control. I don't think birthing women are completely to blame for the state of the OB industry, but they are definitely part of it. They allow themselves to be controlled and treated like crap, because they don't know they have a choice.