It's less about making things up and more about then-current ideas that are now outdated.

Depend upon it there comes a time when for every addition of knowledge you forget something that you knew before.

There are more of them in Holmes stories, like like the idea that you can tell a man's intelligence from his skull shape/size (phrenology).

I have a lot of useless knowledge but that doesn't seem to stop me from accumulating useful knowledge.

As I understand it (not that I can quote any research), knowledge helps gain more knowledge due to how memory works; it's easier to remember something if you have previous ideas to which to "link" or associate the new ones (and those links don't have to be within the same domain of knowledge). Also, wouldn't it be true that the more things you understand, the more likely you are to have a shorter inferential distance to whatever new ideas you come across?