I was startled by your discussion of Blaine's comment that "all history is biography". I'd like to suggest that Blaine makes the comment in much the way you describe, but that Weer's remembering it reflects something else, and Wolfe's including it in the text something else again.
To Wolfe, the idea is that history can only be told through the lens of a system of values. As a writer Wolfe understood this, because no writer can prevent the totality of events as they happened. Every story, and every history, is a filtered, value weighted, interpretation of a set of facts.
So too is every personality. What Wolfe is really doing here is showing the gradual erosion of Weer's ego, like the house Weer lives in which he describes as "melting like a candle".
Weer is struggling with the idea that his history, his ego, is little more than a collection of lies and sheer nonsense. If you strip all that away, what's left of Weer?