Actually, I read a fan theory I like: Only those who were present at the dawn of time in COIE remember the multiverse after Infinite Crisis. Thus, Wildcat, the Thunderbolt, etc do remember various other versions of themselves, but newbies like Booster Gold, Jakeem Thunder and the average everyday joe on the street don’t.
So in other words (if this is true), the whole point of InfCrisis was to “fix” the editoral last-minute screw-ups with COIE. Wolfman’s original idea at the beginning of COIE was that no-one would remember anything, but everything was also supposed to reboot with a #1 issue after Crisis. When economics prevented that and nixed the idea (Teen Titans was DC’s best selling book and if Batman #1 came out, you’d have at least a real-time year before you could even create Robin). they came to a compromise (about 2/3ds of the way through COIE, unfortunately)
The compromise was everyone at the Dawn of Time remembers everything (and apparently they just don’t talk about it), and people who weren’t at the Dawn of Time don’t remember anything(. Which is how Crisis ended (remember Batman, Jason Todd Earth-1 and Alex Luthor talking to Luthor E1 in Crisis (11?)? The heroes remember, the bad-guys don’t. Ditto with Joan and Jay Garrick in the same issue. Jay remembers that he’s from Earth 2 AND he remembers his “Post Crisis” history, Joan doesn’t realize that anything’s up and as far as she’s concerned there’s only been one Earth, Earth Post-Crisis and as far as she’s concerned, she’s always been on there. Superman Earth-2 remembers, Lois, earth Post-Crisis doesn’t.
That was the status quo at the end of Crisis. But over the next year things got messed up. Writers were promised that Crisis was a way to start fresh and how fresh can it be if everyone remembers everything? Byrne in particlar was upset: a big part of his Superman reboot would be that Superman is (and always had been) the last survivor of Krypton. It wouldn’t work if Supes remembered the Bottle City, The Phantom Zone, Argo CIty, Krypto, Beppo, Supergirl, Dev Em, Zor-El and Allura etc. So somewhere between Crisis #12 and Man Of Steel #1 about 1/2 the characters forgot the Crisis entirely.
There was an in-story explaination for this: in All-Star Squad that robot woman (Mechanique?) and (IIRC) Aphrodite (Legends of Wonder Woman, IIRC) were holding back the full effects of the Crisis and when they stopped, everything finally changed.
The big problem with this is that there was little-to-no coordination between the books: Brainiac 5 remembered Supergirl long after Man Of Steel #1 established that she never existed. The Pre-Crisis Jason Todd was in Post-Crisis Teen Titans while the Post-Crisis Jason Todd was just starting to appear in Batman (he hadn’t even gotte the costume yet). Lyta Trevor (Fury) in Infinity Inc. remembered that her mom and dad were the Earth-2 Wonder Woman and Steve Trevor, etc.
Then there was the silly editorial dictate that cmkeller mentioned which
lasted just long enough to hopelessly foul up Hawkman’s history: No more backstory. All stories have to be set in the present. (The idea was that there was too much navel gazing and figuring out how everything fit together and not enough time going forward and telling new stories. Which wasn’t a bad idea, but it messed Hawkman up beyond salvage.)
I think what’ll end up shaking down is this: as far as our heroes are concerned, there’s the “New Earth” history. Sometime about 6 (8?) years before now, there was a big Crisis. There was a multiverse that the New Earth heroes never discovered. During the big Crisis, all the worlds/multiverse got squeezed into New Earth and the memories of the other heroes got squished into the “New Earth” characters. They all know that the history of New Earth is the “real” history, but they have vague, dreamlike memories of their counterparts.
Starting with 52 #2 and going forward (for the rest of the series?), there’s going to be a (10? page) backup in 52 explaining the history of the DC universe, who remembers what and how it all fits together. I’ve heard 5th hand (so take it with a grain of salt) that unlike the (imo very pretty but failed) History of the DC Universe comic, it’s NOT going to spend a bunch of time worrying about the distant past and far future. It’ll deal primarily with what happened in New Earth in the various “Heroic ages” (JSA, JLA, Legion).
If Infinite Crisis’s aftermath is handled correctly, it’ll fix everything: you don’t have a useless Power Girl with at least 3 different non-workable origins(did anyone like the Arion origin?) and random powers-du-jour, you don’t have to spend issues trying to explain Hawkman (so…wait…was it Hawkman Earth-2 in that issue of Justice League or was it the Thanagarian spies?), Troia’s three or four histories all fit: It all happened. Just like we saw it. Now we go foward.
This is what was originally supposed to happen in COIE. Cite: Amazing Heroes #91 in an interview with Marv Wolfman* and the Crisis Compendium in the big fancy 2-book hardcover version of Crisis.
**Heh–they used to have a “Silly Cover” feature. In this special “Crisis” issue, the silly cover was "Identity Crisis"9