As told he submitted to 17 publishers getting rejections. It was apparently the publishers idea to present it as memoir (which apparently isn't uncommon with biographical novels, see this interesting
piece).
I don't blame Oprah for the problem, though she gets attached to it because while the book was doing good business before it was sent into the stratosphere by its selection for her book club.
I mostly blame Frey, with some blame for the publisher (not sure how the interaction went so without details I'll give them the benefit of the doubt). I would prefer that Oprah had taken the opportunity to say that while the message of the book is powerful, intentional deceipt is a terrible thing and Frey should be ashamed.