Sergio Leone wanted the movie to have a double reading and some ambiguity.
If a viewer wants to opt for a single interpretation and chooses the reality reading, this flaw doesn't exist.
Of course how could Leone portray the 1960s other than by using real examples? If the 1968 scenes had contained imaginary things similar to items we see in early science fiction films, it would have been apparent that the 1968 scenes were an opium induced dream. Leone didn't want this.
From Leone's 1984 interview with Jean A Gili:
Gili: "The editing of the film helps to read it on two levels."
Leone: "This was done on purpose...This was done very carefully."
and Stuart Kaminsky:
"Is the whole tale an opium dream by Noodles - a dream in which what he projects as a wasted life will be justified in the future, in which, in fantasy, he will discover that he did not betray his friends at all but was, himself, the tragic victim who becomes the tragic hero?
A problem with this is that the period information in 1968 is contextually specific. In a novel, the illusion might well carry. In the film, we see television, 1968 automobiles, 1968 clothing, a frisbee, etc. The information is not a distortion alone, but if it is an opium fantasy, then it is the fantasy of a seer. We might also argue that we are dealing with a problem of convention. The fantasy of the future will lose the context of assumed naturalism of that future (which is, in this case, 1968, our past) which deviates from our experience of that world.
Simply put, we have a sense of what existed in 1968. Were that to be confounded in a projection clearly seen as fantasy from 1933, it would change the genre of perception. Note, for example, the odd sensation of examining the "future" in a film that is now past. Just Imagine, Things to Come, and The Time Machine - all three predict a future that did not come to be, but that was in the realm of science fiction. What, as in the case of Once Upon a Time in America, do we do if we do not want to deal with the assumption of how the future will look to someone fantasizing in 1933."
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