I once wrote a short story in a college fiction class where the characters, but not the events, were all based on real people – myself and two of my friends.
I worried for a long time about the ethics of doing this, but decided I had disguised everyone enough that it wouldn’t matter. I felt very guilty about “using” my friends in this way, but not at all so about myself. I was, I thought, fair game for my own writing.
When I turned in the story to my classmates, the character whom they all found the most morally repugnant was the one based on me. This taught me that I contained, or sympathized with, a person who was highly dislikeable.
It also taught me that in the process of transferring “truth” to “fiction,” enough is always changed so that you don’t have to worry about “using” anyone. I remind myself of this now, because you have to keep learning it over and over and over again.